Which of the following statements is false concerning Variable Interest Entities? Multiple Choice Sometimes Variable Interest Entities do not have independent management. A Variable Interest Entity cannot take the legal form of a partnership or corporation. Most Variable Interest Entities are established for valid business purposes. Variable Interest Entities have little need for voting stock.

'Control' exists when the parent owns less than half of the voting power of an entity when: Select one alternative: the remaining investors act in unison to outvote the parent. other shareholders actively cooperate when exercising their votes. all other shareholdings are widely dispersed. other shareholders in the entity are passive investors.

9 You are trying to decide if an entity you are reviewing is a government or a not-for-profit. Which of the following would indicate it is a government rather than a not-for-profit entity? Multiple Choice Absence of profit motive. A primary source of revenues is taxes. Resource providers do not expect benefits proportional to the resources provided. Absence of a defined ownership interest that can be sold, transferred, or redeemed.

Transferring corporate assets to shareholders for less than fair market value is a form of Multiple Choice looting. piercing. authorizing. capitalizing.

Please indicate which of the following statements is true regarding types of business entities? Multiple Choice O None of the choices are true. Ownership in a partnership is represented by having shares of common stock. For accounting purposes a sole proprietorship is not a separate entity from its owner. Sole proprietorships are subject to double taxation.

Proxy access allows a shareholder to circulate an alternative proxy card with a rival slate of board candidates.   Question options:   a) True   b) False

True or False: An S Corporation will not be treated as having more than one class of stock solely because of differences in voting rights (i.e. both voting and non-voting common stock).

True/False. In their Articles of Incorporation, corporations that want to maintain flexibility about future business ventures they might engage in often state a very generic corporate purpose (e.g., “engage in any activity that is lawful for domestic corporations”) or do not include a purpose at all if listing a purpose is optional.

A trustee for a company that is being liquidated voids a preference transfer. What has happened, and why did the trustee take this action?

What advantages does a sole proprietor offer? What is a major drawback of this type of organization?