, TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) The principal shortcoming of the sole proprietorship is the owner's legal 1) _______
liability for all obligations of the business.
2) A partnership is similar to a sole proprietorship except there is more 2) _______
than one owner.
3) In a sole proprietorship, the owner is personally responsible for only the 3) _______
first $335,000 of the company's debt.
4) There are no general partners in a limited partnership. 4) _______
5) The ownership of a corporation can be transferred more easily than can 5) _______
the ownership of an individual proprietorship or partnership.
6) If a corporation goes bankrupt, the shareholders are responsible for the 6) _______
debts the corporation had incurred above and beyond their initial
investment.
7) At present, corporations with taxable income between $335,000 and 7) _______
$10,000,000 pay an effective (or average) 34 percent rate on all their
taxable income.
8) Corporations with taxable incomes less than $75,000 face an effective (or 8) _______
average) tax rate of 15 percent.
9) If a company must pay the alternative minimum tax (AMT), the tax rate 9) _______
will be 40 percent of minimum taxable income.
10) For the corporation, depreciation charges are deductible for tax 10) ______
purposes.
11) A depreciable capital asset in a three-year property class (as published 11) ______
by the U.S. Treasury) is generally depreciated over four years.
12) Equity financing has a tax advantage since dividends paid out to 12) ______
shareholders reduce a firm's taxable income.
13) A corporation with $1,000,000 in taxable income, $10,000 of which is in 13) ______
the form of dividend income, normally owes federal taxes of $1,020 on
the dividend income.
14) A capital gain is the amount by which the proceeds from the sale of a 14) ______
capital asset exceeds its depreciated (tax) book value.
15) For the corporation, interest received on corporate and Treasury 15) ______
securities is fully taxable at the federal level.
16) A Subchapter S corporation allows its owners to be taxed as though it 16) ______
were a partnership, while still allowing them to keep the corporate form
of organization.
1) The principal shortcoming of the sole proprietorship is the owner's legal 1) _______
liability for all obligations of the business.
2) A partnership is similar to a sole proprietorship except there is more 2) _______
than one owner.
3) In a sole proprietorship, the owner is personally responsible for only the 3) _______
first $335,000 of the company's debt.
4) There are no general partners in a limited partnership. 4) _______
5) The ownership of a corporation can be transferred more easily than can 5) _______
the ownership of an individual proprietorship or partnership.
6) If a corporation goes bankrupt, the shareholders are responsible for the 6) _______
debts the corporation had incurred above and beyond their initial
investment.
7) At present, corporations with taxable income between $335,000 and 7) _______
$10,000,000 pay an effective (or average) 34 percent rate on all their
taxable income.
8) Corporations with taxable incomes less than $75,000 face an effective (or 8) _______
average) tax rate of 15 percent.
9) If a company must pay the alternative minimum tax (AMT), the tax rate 9) _______
will be 40 percent of minimum taxable income.
10) For the corporation, depreciation charges are deductible for tax 10) ______
purposes.
11) A depreciable capital asset in a three-year property class (as published 11) ______
by the U.S. Treasury) is generally depreciated over four years.
12) Equity financing has a tax advantage since dividends paid out to 12) ______
shareholders reduce a firm's taxable income.
13) A corporation with $1,000,000 in taxable income, $10,000 of which is in 13) ______
the form of dividend income, normally owes federal taxes of $1,020 on
the dividend income.
14) A capital gain is the amount by which the proceeds from the sale of a 14) ______
capital asset exceeds its depreciated (tax) book value.
15) For the corporation, interest received on corporate and Treasury 15) ______
securities is fully taxable at the federal level.
16) A Subchapter S corporation allows its owners to be taxed as though it 16) ______
were a partnership, while still allowing them to keep the corporate form
of organization.
