Jordan owns Dog Gone Good Dogs, a sole proprietorship

Jordan owns Dog Gone Good Dogs, a sole proprietorship. To raise capital, Jordan contacts Jenny, who has a lot of money and is willing to invest in her business. If Jordan wants to make Jenny an owner, what will happen to the business entity?

 a. It becomes a General Partnership

 b. It is a sole proprietorship with two owners.

 c. It automatically dissolves.

d. No change

Question 2 If Chelsea is allowed to “pierce the corporate veil” of Palouse Dirt Inc. which is wholly owned by Sam, what is the result?

a. All employees of Palouse Dirt Inc. must pay damages to Chelsea.

b. The bank for Palouse Dirt Inc. must pay damages to Chelsea.

c. Palouse Dirt Inc. must file bankruptcy

d. Chelsea is automatically entitled to a controlling interest in Palouse Dirt Inc.

e. Sam must pay damages to Chelsea from his personal assets.

Question 3 Jackie is the owner of Jack’s Knick knacks, a sole proprietorship. If Jack’s employee causes a car accident while delivering knick knacks to one of the stores and is sued for damages, what happens.

a. She is protected by the state statute so her personal assets cannot be subject to a judgment.

b. Her liability is limited to the extent of her capital expenditures

c. Her liability is limited to the extent of her original investment

d. All of her assets, car, home, bicycle, etc can be taken away to satisfy the judgment.

Question 4 A partner’s profit from a partnership is taxed as income to the business on the partnership tax return.

True

 False

Question 5 If one of the partners in a business takes a vacation and the other partners exercise poor judgment and causes the partnership significant debt, the vacationing partner is not personally liable for the debt since he was not involved in the poor business decisions.

True

False

 Question 6   Kayla and Hannah come to an agreement for building Kayla’s new home. Hannah has her attorney draw up a contract. Both sign the contract. A dispute later arises over a specific term in the contract. That term will not be considered part of the contract unless both Kayla and Hannah have read it.

True

 False

Question 7 of 33 > >> L A Moving to another question will save this response. John’s Coffee Palace Inc. had a very profitable year. John emails his employees that things have been so good he will give them all a $1,000 bonus at the end of the year. By the end of the year after he paid the college tuition for his 4 kids he changes his mind. His executive secretary was really wanting that bonus and sued him to make good on his promise. She will win because his agreement was in writing and she accepted it.

True

False

Question 27 Many, including your professor, feel that a general partnership is one of the most risky forms of business,

True

False

Question 29 Moon Tours, Inc., is a sub “S” corporation. Moon Tours, Inc. is O

a. eligible to make public offerings of securitites

b. exempt from filing a certificate of incorporation

 c. may not restrict the transfer of its stock O

d. taxed in the same manner as a partnership