1. The limited liability company may elect to be manager-managed rather than member-managed, which means that only authorized members may legally bind the corporation. a. True b. False 2. A corporation is a separate entity for accounting purposes but not for legal purposes. a. True b. False 3. When compared to a corporation, one of the major disadvantages of the partnership is its limited life. a. True b. False _ 4. Each partner may withdraw the assets he or she contributed to the partnership at any time. a. True b. False 5. Twenty percent of all businesses in the United States are corporations, and they account for 80% of the total business dollars generated. a. True b. False 6. When common stock is issued in exchange for land, the land should be recorded in the accounts at the par value of the stock issued. a. True b. False 7. When a corporation issues stock at a premium, it reports the premium as an Other income item on the income statement. a. True b. False 8. A new partner contributes accounts receivable to a partnership, which appears in the ledger of his sole proprietorship at $20,500, and there was an allowance for doubtful accounts of $750. If $600 of the accounts receivable are completely worthless, the partnership Accounts Receivable should be debited for $19,900. a. True b. False 9. Cash dividends become a liability to a corporation on the date of record. a. True b. False Match each statement to the appropriate term (a-h). a. Partnership b. Partnership agreement c. Distribution of remaining cash to partners d. Mutual agency e. Equally f. Death of a partner g. Liquidation h. Unlimited liability 16. When a partnership cannot pay its debts with business assets, the partners must use personal assets to meet the debt 17. Agreement that is the contract between partners 18. A voluntary association of two or more persons who co-own a business for profit 19. Every partner can bind the business to a contract within the scope of the partnership's regular business operations 20. The process of going out of business by selling the entity's assets and paying its liabilities 21. Without an agreement, the law will stipulate this method of sharing profits and losses 22. The final step in the liquidation of a partnership 23. Causes the closing of accounts and settling with a partner's estate TIL Match each of the following stockholders' equity concepts to the appropriate term (a-h). a. Articles of incorporation b. Limited liability c. Bylaws d. Corporation e. Public corporation f. Board of directors g. Private corporation h. Dividends 24. A legal entity, separate from the people who create and operate it 25. A company whose shares can be bought and sold in public markets 26. The rules and procedures for conducting a corporation's affairs 27. A company whose shares are not bought or sold in public markets 28. Document that formally creates a corporation 29. Creditors cannot pursue stockholders' personal assets to satisfy claims 30. Group that meets periodically to establish corporate policies 10. If the dividend amount of preferred stock, S50 par value, is quoted as 8%, then the dividends per share would be S4. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 11. Which of the following statements is not true about a 2-for-1 split? a. Par value per share is reduced to half of what it was before the split. b. Total contributed capital increases. c. The market price will probably decrease. d. A stockholder with 10 shares before the split owns 20 shares after the split. 12. A change in the ownership of a partnership results in the a. consolidating of the partnership b. liquidating of the partnership c. realization of the partnership d. dissolution of the partnership 13. The excess of issue price over par of common stock is termed an) a. discount b. income c. deficit d. premium 14. Luke and John share income and losses in a 2:1 ratio after allowing for salaries of $48,000 to Luke and $60,000 to John. Net income for the partnership is $93,000. Income should be divided as a. Luke, $46,500; John, $46,500 b. Luke, $55,000; John, $38,000 c. Luke, $65,000; John, $28,000 d. Luke, $38,000; John, $55,000 15. The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is a. decrease total liabilities and stockholders' equity b. increase total expenses and total liabilities c. increase total assets and stockholders' equity d. decrease total assets and stockholders' equity