(WGU D078) BUS 2060 Business Environment Applications I - Complete OA Review (WGU D078) BUS 2060 Business Environment Applications I - Complete OA Review (WGU D078) BUS 2060 Business Environment Applications I - Complete OA Review
,1. Multiple Choice: Which of the following is a characteristic of a
sole proprietorship?
a) Limited liability
b) Perpetual existence
c) Single taxation
d) None of the above
Correct Answer: c) Single taxation
Rationale: Sole proprietorships are taxed once on the owner's
personal income tax return, making single taxation a defining
characteristic.
2. Fill-in-the-Blank: A __________ is a legal entity created under
state law that is separate from its owners.
Correct Answer: Corporation
Rationale: A corporation is recognized as a separate legal entity
from its owners, who are shareholders.
3. True/False: In a partnership, each partner has unlimited liability
for the debts of the business.
Correct Answer: True
, Rationale: Partners in a general partnership have unlimited
liability, meaning they are personally responsible for the debts of
the business.
4. Multiple Response: Select all that apply. Which of the following
are advantages of a limited liability company (LLC)?
a) Flexibility in management
b) Limited liability protection
c) Double taxation
d) No restrictions on the number of owners
Correct Answers: a) Flexibility in management, b) Limited
liability protection, d) No restrictions on the number of owners
Rationale: LLCs offer flexibility in management, limited liability
protection for its members, and no restrictions on the number of
owners, unlike corporations which can face double taxation.
5. Multiple Choice: What is the primary purpose of antitrust laws?
a) To promote fair competition
b) To increase consumer prices
c) To protect small businesses
d) To encourage monopolies
Correct Answer: a) To promote fair competition
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