MBA601 Exam 1 Newest 2025/2026
Questions and Correct Answers Graded
A+|Assured Success Real Exam
If you are an investor in a corporation, limited liability means
1. You are personally liable
2. You are only liable for your investment in the company
3. You can be personally sued
4. None of the above - CORRECT ANSWER-2. You are only liable for your
investment in the company
,Define the 3 Forms of business - CORRECT ANSWER-Sole Proprietorship
Partnership
Corporations
Define the Form: Sole Proprietorship - CORRECT ANSWER--simple
-owner=manager
-complete control
-personally liable
Define the Form: Partnership - CORRECT ANSWER-- owner=manager
- larger, has more products
- personally liable
Define the Form: Corporation - CORRECT ANSWER-- most capital
- limited liability
- only liable for investments
- is its own separate entity
,What are the advantages to a corporation? - CORRECT ANSWER-1) Limited
liability
2) Flexibility in raising capital
3) Perpetual life (if owner dies, business continues to live)
4) Ownership can be transferred easily
What are the disadvantages of corporation? - CORRECT ANSWER-1. agency
problems
2. more regulations
The advantage of a sole proprietorship is
1. Easy to raise a lot of capital
2. Complete control
3. Limited liability
4. You are liable for debts and lawsuits - CORRECT ANSWER-2. Complete
control
The primary reason for starting a corporation is
1. to limit your taxes
2. to raise a lot of capital
, 3. to gain more control over the business
4. all of the above - CORRECT ANSWER-2. to raise a lot of capital
A corporation is its own separate legal entity.
True
False - CORRECT ANSWER-True
In a corporation, the owner is also the manager.
True
False - CORRECT ANSWER-False
What are the disadvantages of a corporate entity (select all that apply)
Limited liability
Double taxation
Increased regulation
Less control - CORRECT ANSWER-Double taxation
Increased regulation
Less control
Questions and Correct Answers Graded
A+|Assured Success Real Exam
If you are an investor in a corporation, limited liability means
1. You are personally liable
2. You are only liable for your investment in the company
3. You can be personally sued
4. None of the above - CORRECT ANSWER-2. You are only liable for your
investment in the company
,Define the 3 Forms of business - CORRECT ANSWER-Sole Proprietorship
Partnership
Corporations
Define the Form: Sole Proprietorship - CORRECT ANSWER--simple
-owner=manager
-complete control
-personally liable
Define the Form: Partnership - CORRECT ANSWER-- owner=manager
- larger, has more products
- personally liable
Define the Form: Corporation - CORRECT ANSWER-- most capital
- limited liability
- only liable for investments
- is its own separate entity
,What are the advantages to a corporation? - CORRECT ANSWER-1) Limited
liability
2) Flexibility in raising capital
3) Perpetual life (if owner dies, business continues to live)
4) Ownership can be transferred easily
What are the disadvantages of corporation? - CORRECT ANSWER-1. agency
problems
2. more regulations
The advantage of a sole proprietorship is
1. Easy to raise a lot of capital
2. Complete control
3. Limited liability
4. You are liable for debts and lawsuits - CORRECT ANSWER-2. Complete
control
The primary reason for starting a corporation is
1. to limit your taxes
2. to raise a lot of capital
, 3. to gain more control over the business
4. all of the above - CORRECT ANSWER-2. to raise a lot of capital
A corporation is its own separate legal entity.
True
False - CORRECT ANSWER-True
In a corporation, the owner is also the manager.
True
False - CORRECT ANSWER-False
What are the disadvantages of a corporate entity (select all that apply)
Limited liability
Double taxation
Increased regulation
Less control - CORRECT ANSWER-Double taxation
Increased regulation
Less control
