Test Bank for Intermediate Financial Management 13th Edition Eugene F. Brigham, Phillip R. Daves Chapter1-31
1. The form of organization for a business is not an important issue, as this decision has very little effect on the income and wealth of the firm's owners. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: IFMG.DAVE.19.01.03 - LO: 1-3 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and analysis of public information LOCAL STANDARDS: United States - OH - Default City - TBA TOPICS: Firm organization KEYWORDS: Bloom’s: Knowledge DATE CREATED: 10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM 2. The major advantage of a regular partnership or a corporation as a form of business organization is the fact that both offer their owners limited liability, whereas proprietorships do not. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy QUESTION TYPE: True / False HAS VARIABLES: False LEARNING OBJECTIVES: IFMG.DAVE.19.01.03 - LO: 1-3 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking STATE STANDARDS: United States - AK - DISC: Goals of the firm, role of - DISC: Goals of the firm, role of finance, and analysis of public information LOCAL STANDARDS: United States - OH - Default City - TBA TOPICS: Firm organization KEYWORDS: Bloom’s: Knowledge DATE CREATED: 10/30/2017 8:01 PM DATE MODIFIED: 1/6/2018 12:00 PM 3. There are three primary disadvantages of a regular partnership: (1) unlimited liability, (2) limited life of the organization, and (3) difficulty of transferring ownership. These combine to make it difficult for partnerships to attract large amounts of capital and thus to grow to a very large size. Copyright Cengage Learning. Powered by Cognero.
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