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BUL 3310 BAILEY EXAM 4 FSU QUESTIONS AND ANSWERS 100% PASS
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BUL 3310 BAILEY EXAM 4 FSU QUESTIONS AND ANSWERS 100% PASS Which of the following statements about LLC's is false? LLC's are a relatively new form of business organization. There is an extensive body of law based on court decisions governing LLC's. Shareholders have no personal liability for ...

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  • December 17, 2024
  • 92
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • bul 3310 bailey exam 4 fsu questions and answers 1

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BUL 3310 BAILEY EXAM 4 FSU
QUESTIONS AND ANSWERS 100%
PASS

Which of the following statements about LLC's is false?




LLC's are a relatively new form of business organization.




There is an extensive body of law based on court decisions governing LLC's.




Shareholders have no personal liability for the debts of the LLC.




The LLC is not a taxable entity. - ANSWER ✔✔-There is an extensive body of law based on court

decisions governing LLC's.


Investors favor using Limited Partnerships to invest in commercial real estate because they can use the

depreciation of the property as a tax loss.




T or F - ANSWER ✔✔-True


Professional corporations are business entities organized under state law.


Created by ©EmilyCharlene 2025. All rights reserved.

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T/F? - ANSWER ✔✔-True


Allfam is a closely held family corporation, many of whose shareholders are employees of the

corporation. In an attempt to reduce its taxes, Allfam paid its shareholder-employees enormous salaries

and deducted the salaries as a corporate expense. Is Allfam permitted to do this?




Yes, this is a legitimate way for closely held corporations to reduce their taxes.




No, the IRS will disallow the deductions for unreasonably high salaries and tax them as dividends.




No, the shareholder-employees will have do return the excess portion of their salaries to the corporation.




No, the IRS will disallow the deductions for this year, but will allow the corporation to treat them as

carry-forward losses for next year. - ANSWER ✔✔-No, the IRS will disallow the deductions for

unreasonably high salaries and tax them as dividends


Which of the following statements about the limited partner in a limited partnership is FALSE?




Limited partners may participate fully in the management of the partnership.




There must be at least one limited partner.




Created by ©EmilyCharlene 2025. All rights reserved.

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Limited partners must approve any changes to the partnership agreement.




Limited partnerships that invest in real estate are typically good tax shelters for the limited partners. -

ANSWER ✔✔-Limited partners may participate fully in the management of the partnership.


Vic and Thom bought an antique Corvette at auction with the intent of restoring it and selling it for a

profit, which they will share equally. Vic and Thom have formed a professional association.




T/F? - ANSWER ✔✔-False


Members of professional associations and professional corporations are eligible under the Tax Code to

participate in pension and profit-sharing plans.




T/F? - ANSWER ✔✔-True


In a Limited Liability Company, the losses and profits pass through to the shareholders.




T/F? - ANSWER ✔✔-True


The partnership must pay interest each year on the capital contributions of the partners.




False - ANSWER ✔✔-False


If a partnership agreement does not say how losses will be shared, they will be shared




Created by ©EmilyCharlene 2025. All rights reserved.

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Equally among the partners




Proportionately according to the capital contribution of each partner.




In whatever way the profits are shared.




Equally among those partners who have not made loans to the partnership - ANSWER ✔✔-In whatever

way the profits are shared


Partnerships typically buy life insurance policies on each partner in order to fund the required purchase

of the partner's interest in the partnership when the partner dies.




T/F? - ANSWER ✔✔-True


An incoming partner has unlimited personal liability for the already existing debts of the partnership.




T/F? - ANSWER ✔✔-False


Which of the following statements is true about a partnership name?




(The name is an asset of the partnership that may be sold or assigned.




The name must include the word "company" in it.)




Created by ©EmilyCharlene 2025. All rights reserved.

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