1. Which of the following is a primary legal characteristic of the corporate form of business? A. The management of the business is centered in a Board of Directors elected by the shareholders. B. A shareholder must seek permission to sell his stock. C. The life of the corporation will terminate when a majority of the shareholders die or cease to exist D.A shareholder is personally liable for the debts of the corporation. 2. Loda Inc. made an $8,300 nondeductible charitable contribution and a $2,000 nondeductible political contribution this year. Which of the following statements is true? A. Both nondeductible contributions are permanent book/tax differences. B. Both nondeductible contributions are temporary book/tax differences C. The nondeductible charitable contribution is a temporary book/tax difference. The nondeductible political contribution is a permanent book/tax difference. D. The nondeductible charitable contribution is a permanent book/tax difference. The nondeductible political contribution is a temporary book/tax difference. 3. Fleet, Inc. owns 85% of the stock of Pete, Inc. and 35% of the stock of Zete, Inc. The remaining stock of Pete and Zete is owned by unrelated individuals. Which of the following statements is correct? A. Fleet, Pete, and Zete are an affiliated group. B. Fleet and Zete are an affiliated group C. Fleet and Pete are an affiliated group. D. There is no affiliated group here. 4. Brace, Inc. owns 90 % of West common stock. This year, Brace generated S50,000 operating income and received $10,000 dividends from West. Brace's taxable income is: A. $53,000 B. S58.000 C. $50,000 D. $52,000 5. A corporation that owns more than $10 million of total assets uses which schedule to reconcile book income to taxable income? A. Schedule M- B. Schedule M-2 C. Schedule M-3 D. Schedule M-4