Acc 497 Final Exam Question and Answers

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BUSINESS ENVIRONMENT AND CONCEPTS Section 1: Business Structure 1. The uniform law, issued in 1984 by the Committee on Corporate Laws of the American Bar Association, that regulates the formation, operation, and termination of corporations is A. The Model Business Corporation Act B. The Uniform Commercial Code C. The Revised Model Business Commercial Code D. The Standard Incorporation Act 2. Which of the following statements is true? A. The exchange of stock for services rendered is not a taxable transaction. B. The repeal of Sec. 351 would result in more existing businesses being incorporated. C. Section 351 was enacted to allow taxpayers to incorporate without incurring adverse tax consequences. D. Section 351 is an example of a negative aspect of the corporate form of business organization. 3. Which of the following statements is true? A. Formation of a partnership requires legal documentation. B. An individual engaged in the active conduct of a business must elect not to be taxed as a partnership. C. If two people (or business entities) work together to carry on any business or financial operation with the intention of making a profit and sharing that profit as co-owners, a partnership exists for federal income tax purposes. D. The partnership form of business creates double-taxation because individual partners are taxed, and the partnership is also taxed as a separate legal entity. Want to download the Final Exam answers..?? Click ACC 497 Final Exam BUSINESS ENVIRONMENT AND CONCEPTS Section 2: Economic Concepts Essential to Obtaining an Understanding of an Entity's Business and Industry 4. What effect would a decrease in interest rates by the Federal Reserve most likely have in the nation’s manufacturing sector, all other factors remaining constant? A. An increase in both production and employment B. A decrease in both production

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