Choose the correct answer for each question.

1. Only one of the following statements about the sole trader form of business is correct:

   1.   ?    Sole traders do not need to consult accountants
   2.   ?    A sole trader is liable to income tax on his/her earnings
   3.   ?    A sole trader is not required to pay National Insurance contributions
   4.   ?    Sole traders must register the name of their business with the Registrar of Companies

2. One of the following statements about sole trader businesses is incorrect:

   1.   ?    The sole trader form of business is easy to set up
   2.   ?    Sole traders are personally responsible for the liabilities of the business
   3.   ?    Sole trader businesses are obliged to make their accounts available to the general public
   4.   ?    A sole trader is entirely responsible for the management of his/her business

3. Only one of the following statements about the partnership form of business is correct:

   1.   ?    Partnerships must make their accounts available to the general public
   2.   ?    Partners are personally liable for the liabilities of the business
   3.   ?    Partners must share their profits in equal shares between them
   4.   ?    Partnerships are invariably very small businesses

4. One of the following statements about the partnership form of business is incorrect:

   1.   ?    A partnership is a business run by two or more people
   2.   ?    Each partner is liable under the law for the actions of his or her partners
   3.   ?    A partnership business is not difficult to set up
   4.   ?    Partnerships are liable to corporation tax on their profits

5. Only one of the following statements about the limited company form of business is correct:

   1.   ?    The directors of a limited company are obliged by law to hold shares in the company
   2.   ?    Shareholders of a limited company share the profits equally between themselves
   3.   ?    A limited company cannot itself borrow money; borrowing must be done on its behalf by its shareholders or directors
   4.   ?    Members of the general public can find out about the financial affairs of the company

6. One of the following statements about the limited company form of business is incorrect:

   1.   ?    Shareholders are personally liable for all the liabilities incurred by the business
   2.   ?    Regular filing of information about the affairs of the company is a legal requirement
   3.   ?    The limited company form of business allows ownership of the business to be spread amongst many people
   4.   ?    Shareholders can appoint professional

7. One of the following statements about financing is correct:

   1.   ?    In a leasing arrangement the lessor and the lessee own the leased asset jointly
      
   2.   ?    A partnership wishing to raise finance can issue additional shares
   3.   ?    Venture capitalists often help sole traders by investing in their businesses
   4.   ?    Bank overdrafts are repayable on demand

8. One of the following statements about taxation is correct:

   1.   ?    Capital gains tax is levied on business gains made by sole traders, partnerships and limited companies
   2.   ?    Company directors are liable to corporation tax on their salaries
   3.   ?    All businesses, regardless of size, are required by law to register for VAT
   4.   ?    Partners in a partnership are exempt from National

9. One of the following statements about taxation is incorrect:

   1.   ?    The Customs & Excise is responsible for the administration of the VAT system
   2.   ?    Company directors are liable to income tax on the salaries they receive from the company
   3.   ?    Partners are subject to a special partnership tax on their share of profits
   4.   ?    VAT is a form of indirect taxation