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Corporations
Contributed by: O'Reilly
  • 1. Corporations are formal organizations that are set up and run to conduct business activities, engaging in various ventures such as manufacturing, trading, and providing services. They are typically owned by shareholders who invest capital in the company in exchange for ownership stakes represented by shares of stock. Corporations are considered legal entities separate from their owners, providing limited liability protection to the shareholders. They are governed by a board of directors who are responsible for making important decisions, setting strategic goals, and overseeing the company's operations. Corporations play a crucial role in the economy, generating employment opportunities, driving innovation, and contributing to economic growth and development.

    What is a corporation?
A) A legal entity separate from its owners.
B) An informal group of people.
C) A partnership between two individuals.
D) A sole proprietorship.
  • 2. Who owns a corporation?
A) Government.
B) Customers.
C) Shareholders.
D) Employees.
  • 3. What is a publicly traded corporation?
A) A corporation with a single owner.
B) A non-profit corporation.
C) A corporation that is government-owned.
D) A corporation whose shares are traded on stock exchanges.
  • 4. How are dividends distributed to shareholders taxed?
A) As capital gains or ordinary income.
B) Only taxed at the corporate level.
C) Taxed at a flat rate.
D) Tax-free.
  • 5. What is the Securities and Exchange Commission (SEC) responsible for?
A) Regulating the securities industry.
B) Collecting corporate taxes.
C) Managing employee benefits.
D) Overseeing mergers and acquisitions.
  • 6. What is the purpose of a corporate annual meeting?
A) To announce layoffs.
B) To celebrate the company's success.
C) To conduct daily business operations.
D) To update shareholders on company performance and elect directors.
  • 7. Which financial statement shows a corporation's financial position at a specific point in time?
A) Statement of retained earnings.
B) Cash flow statement.
C) Balance sheet.
D) Income statement.
  • 8. What is a proxy statement in corporate governance?
A) A financial incentive for executives.
B) A document disclosing information for shareholder voting.
C) A report on environmental sustainability.
D) A plan for international expansion.
  • 9. What is a merger in the context of corporations?
A) Changing a company's legal structure.
B) Selling a company to another corporation.
C) Combining two companies into one.
D) Splitting a company into two separate entities.
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