Question 1

Jody owns KuppaJoe Kiosks,a sole proprietorship.Jody's liability is

Accepted Answer

A)  limited by state statute and varies from state to state.
B)  limited to the extent of her capital expenditures.
C)  limited to the extent of her original investment.
D)  unlimited.E) None of the above
F) All of the above

Question 2

Felipe is a member of Great States Transport LLC.Felipe's relationship to Great States ends,but the firm continues to do business.This is

Accepted Answer

A)  dissociation.
B)  dissolution.
C)  winding up.
D)  wrongful.E) C) and D)
F) B) and C)

Question 3

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property,which fall under the Statute of Frauds.Their partnership agreement is legally binding

Accepted Answer

A)  only if a copy of the agreement is filed in the appropriate state office.
B)  only if the agreement is reduced to writing.
C)  only if an information return is filed with the Internal Revenue Service.
D)  without more.E) All of the above
F) None of the above

Question 4

Kelly,the owner of Llama Farms,a sole proprietorship,wants to obtain additional business capital but to maintain control.This can best be accomplished by

Accepted Answer

A)  borrowing funds.
B)  bringing in partners.
C)  issuing stock.
D)  selling the business.E) B) and C)
F) B) and D)

Question 5

Location! Realty LLC is a limited liability company (LLC) .Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of

Accepted Answer

A)  all states.
B)  every state in which its members are citizens.
C)  no state.
D)  only the state in which it was formed.E) A) and B)
F) A) and C)

Question 6

Normally,a dissociated member of a limited liability company (LLC)has the right to have his or her interest in the LLC bought by the other members.

Accepted Answer

A) True 
 B)False

Question 7

QuizBooks LLC is a limited liability company.Like any other LLC,unless QuizBooks chooses otherwise,the firm will be taxed as

Accepted Answer

A)  a corporation.
B)  a natural person.
C)  a partnership.
D)  a sole proprietorship.E) None of the above
F) A) and B)

Question 8

In raising capital,a sole proprietor is limited to his or her personal funds-a personal loan is not possible.

Accepted Answer

A) True 
 B)False

Question 9

Cecilia's Day Spa,LLC,is a member-managed limited liability company.If the law in Cecilia's state is like the law in most states,unless the members have agreed otherwise,voting rights are apportioned according to

Accepted Answer

A)  capital contributions.
B)  participation in management.
C)  the number of members.
D)  transactions with the firm.E) B) and D)
F) None of the above

Question 10

CPA Accounting,LLC,is a limited liability company.If the law in CPA's state is like the law in most states,unless the members have agreed otherwise,participants in the firm's management will be considered to include

Accepted Answer

A)  all members.
B)  no member.
C)  one member.
D)  two members,including at least one general partner.E) B) and C)
F) A) and B) A

Question 11

A partner owes to the partnership and the other partners a duty of loyalty.

Accepted Answer

A) True 
 B)False

Question 12

Greta is a member of Hovercraft LLC.As a member,Greta is

Accepted Answer

A)  a manager or officer,but not an owner.
B)  an investor,but not a manager,officer,or owner.
C)  an owner.
D)  a participant,but not an investor,manager,officer,or owner.E) A) and D)
F) B) and C)

Question 13

Fact Pattern 23-2 
Luann and Mace are partners in Networx, a computer peripherals firm.
-Refer to Fact Pattern 23-2.Mace dissociates from Networx.Luann signs a contract with Physik Drives,a wholesale component supplier,apparently on Networx's behalf.Physik does not know of Mace's dissociation.The contract is binding on

Accepted Answer

A)  Luann,Mace,and Networx.
B)  Luann only.
C)  Networx only.
D)  Physik only.E) B) and D)
F) None of the above

Question 14

A limited liability company can be taxed as a partnership.

Accepted Answer

A) True 
 B)False  True

Question 15

For federal income tax purposes,one-member limited liability companies are automatically taxed as sole proprietorships.

Accepted Answer

A) True 
 B)False

Question 16

In a limited partnership,a limited partner is personally liable to the partnership's creditors.

Accepted Answer

A) True 
 B)False

Question 17

A sole proprietor has unlimited liability for all obligations that arise in doing business.

Accepted Answer

A) True 
 B)False

Question 18

An association cannot be a partnership without an express agreement.

Accepted Answer

A) True 
 B)False

Question 19

Pizza & Cookies,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement and the state LLC statute do not cover.The dispute is governed by

Accepted Answer

A)  no law.
B)  the federal Uniform LLC Law.
C)  the principles of partnership law.
D)  the state corporation statute.E) A) and B)
F) A) and C) C

Question 20

A limited liability company must be managed by non-member managers.

Accepted Answer

A) True 
 B)False

Exam 23: Sole Proprietorships, partnerships, Limited Liability Co

Jody owns KuppaJoe Kiosks,a sole proprietorship.Jody's liability is

Correct Answer
verified

Felipe is a member of Great States Transport LLC.Felipe's relationship to Great States ends,but the firm continues to do business.This is

Correct Answer
verified

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property,which fall under the Statute of Frauds.Their partnership agreement is legally binding

Correct Answer
verified

Kelly,the owner of Llama Farms,a sole proprietorship,wants to obtain additional business capital but to maintain control.This can best be accomplished by

Correct Answer
verified

Location! Realty LLC is a limited liability company (LLC) .Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of

Correct Answer
verified

Normally,a dissociated member of a limited liability company (LLC)has the right to have his or her interest in the LLC bought by the other members.

Correct Answer
verified

QuizBooks LLC is a limited liability company.Like any other LLC,unless QuizBooks chooses otherwise,the firm will be taxed as

Correct Answer
verified

In raising capital,a sole proprietor is limited to his or her personal funds-a personal loan is not possible.

Correct Answer
verified

Cecilia's Day Spa,LLC,is a member-managed limited liability company.If the law in Cecilia's state is like the law in most states,unless the members have agreed otherwise,voting rights are apportioned according to

Correct Answer
verified

CPA Accounting,LLC,is a limited liability company.If the law in CPA's state is like the law in most states,unless the members have agreed otherwise,participants in the firm's management will be considered to include

Correct Answer
verified
A

A partner owes to the partnership and the other partners a duty of loyalty.

Correct Answer
verified

Greta is a member of Hovercraft LLC.As a member,Greta is

Correct Answer
verified

Correct Answer
verified

A limited liability company can be taxed as a partnership.

Correct Answer
verified
True

For federal income tax purposes,one-member limited liability companies are automatically taxed as sole proprietorships.

Correct Answer
verified

In a limited partnership,a limited partner is personally liable to the partnership's creditors.

Correct Answer
verified

A sole proprietor has unlimited liability for all obligations that arise in doing business.

Correct Answer
verified

An association cannot be a partnership without an express agreement.

Correct Answer
verified

Pizza & Cookies,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement and the state LLC statute do not cover.The dispute is governed by

Correct Answer
verified
C

A limited liability company must be managed by non-member managers.

Correct Answer
verified

Exam 23: Sole Proprietorships, partnerships, Limited Liability Co

Jody owns KuppaJoe Kiosks,a sole proprietorship.Jody's liability is

Correct AnswerverifiedShow Answer

Felipe is a member of Great States Transport LLC.Felipe's relationship to Great States ends,but the firm continues to do business.This is

Correct AnswerverifiedShow Answer

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property,which fall under the Statute of Frauds.Their partnership agreement is legally binding

Correct AnswerverifiedShow Answer

Kelly,the owner of Llama Farms,a sole proprietorship,wants to obtain additional business capital but to maintain control.This can best be accomplished by

Correct AnswerverifiedShow Answer

Location! Realty LLC is a limited liability company (LLC) .Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of

Correct AnswerverifiedShow Answer

Normally,a dissociated member of a limited liability company (LLC)has the right to have his or her interest in the LLC bought by the other members.

Correct AnswerverifiedShow Answer

QuizBooks LLC is a limited liability company.Like any other LLC,unless QuizBooks chooses otherwise,the firm will be taxed as

Correct AnswerverifiedShow Answer

In raising capital,a sole proprietor is limited to his or her personal funds-a personal loan is not possible.

Correct AnswerverifiedShow Answer

Cecilia's Day Spa,LLC,is a member-managed limited liability company.If the law in Cecilia's state is like the law in most states,unless the members have agreed otherwise,voting rights are apportioned according to

Correct AnswerverifiedShow Answer

CPA Accounting,LLC,is a limited liability company.If the law in CPA's state is like the law in most states,unless the members have agreed otherwise,participants in the firm's management will be considered to include

Correct AnswerverifiedA

A partner owes to the partnership and the other partners a duty of loyalty.

Correct AnswerverifiedShow Answer

Greta is a member of Hovercraft LLC.As a member,Greta is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A limited liability company can be taxed as a partnership.

Correct AnswerverifiedTrue

For federal income tax purposes,one-member limited liability companies are automatically taxed as sole proprietorships.

Correct AnswerverifiedShow Answer

In a limited partnership,a limited partner is personally liable to the partnership's creditors.

Correct AnswerverifiedShow Answer

A sole proprietor has unlimited liability for all obligations that arise in doing business.

Correct AnswerverifiedShow Answer

An association cannot be a partnership without an express agreement.

Correct AnswerverifiedShow Answer

Pizza & Cookies,LLC,is a limited liability company.Among its members,a dispute arises that the operating agreement and the state LLC statute do not cover.The dispute is governed by

Correct AnswerverifiedC

A limited liability company must be managed by non-member managers.

Correct AnswerverifiedShow Answer

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A

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True

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C

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