Business organizations test

What is a charter?

A government document that gives permission to create a corporation

An income statement is used first to record the total sales for the period. Next, it finds the net income by subtracting ______ ___ ________________________________.

All of its expenses including taxes from the revenue sales

Because more than 1 owner is involved, formal legal papers called the " ________ ___ _________", are usually draw up to specify the arrangement between partners.

Articles of Partnership

Common stock represents _____ ownership of a corporation.

Basic

Like a proprietorship, a partnership has limited life; when a pattern dies or leaves the business the partnership must _______ _______ _ _______.

Be dissolved and reorganized

If for example; the corporation, goes out of business and any property or funds remain after all debts have been paid, proffered stock holders would get there investment back ______ common stock holders would get there investment back

Before

The stock holders receive dividends ______ common stock holders would get there's.

Before

Companies sometimes grow _____ and ______.

Bigger and faster

A written promise to repay the amount borrowed at a later date

Bond

A corporation may also borrow money by issueing ________.

Bonds

Sometimes companies merge to catch up with or even eliminate there rivals. For example; Royal Caribbean Cruise Line acquired ________________.

Celebrity cruise line

_______ ______ made them the 2nd largest cruise line behind Carnival.

Celebrity cruise line

If the filing of the corporation is approved, the a _______ is granted.

Charter

The 1st disadvantage of a corporation is both the difficulty and the expense of getting a ________.

Charter

For example; when Chase National Bank and Bank of Manhattan merged, the new organization was called ______ ______.

Chase Manhattan

When an investor purchases stock, he or she becomes an owner of the company with certain ownership rights. The extent of these rights depends on the type of stock purchased ______ or _______.

Common or preferred

Another disadvantage of a partnership is the potential ______ between the partners.

Conflict

Unrelated products, non of which is responsible for a majority of sales?

Conglomerate

corporations may become so large through both mergers and acquisitions, that it becomes a _____________.

Conglomerate

A non cash charge the company takes, for the general ware and tear on its capital goods?

Depreciation

A check representing a portion of the corporate earnings to each stockholder

Dividend

If the corporation is profitable, it may then issue a _______.

Dividend

What is an multi national corporation?

Do not put all of there eggs in one basket.

A 4th advantage of a sole proprietorship is that is _____ ______ have to pat separate business income taxes.

Does not

What is the 1st advantage of a partnership?

Ease of establishment

What is the 2nd advantage of a partnership?

Ease of management

Are sole proprietorships the easiest or the hardest forms of businesses to start?

Easiest

Like a sole proprietorship, a partnership is relatively _______ to start.

Easy

______ is another reason for mergers.

Efficiency

The vote for the stock is then used the _______ __ ______ _ _________, whose duty is to direct the corporations business by setting board policies.

Elect a board of directors

Are charters expensive or not expensive?

Expensive

Most businesses use some of the revenues that they receive from sales, to reinvest in ______, _______ and ______ ___________.

Factories, machinery, and new technology

People who would like to incorporate (_________ __ _________), must file a permission from the national government or state government where the ________________________________.

Farm a corporation, business will have its headquarters.

Mergers take place for a variety of reasons, a company may seek a merger in order to grow ________, to become more ________, to acquire or delivered _____ ______, to eliminate a _______, or to change its _______.

Faster, efficient, better product, rival, image

The revenue received then be used to _______ __________ __________ _ ______ _______.

Finance or expand operations of the business.

A 2nd disadvantage of a sole proprietorship is the difficultly of raising ___________ ___________.

Financial capital

The 4th advantage of a partnership usually attract ________ ________, more easily than a sole proprietorship?

Financial capital

The main disadvantage of a general partnership is that each partner is ______ _______ for the acts of all other partners.

Fully responsible

What is the most common form of partnership?

General partnership

(Corporation) This status, _____________________________,__________________, _________________.

Gives the corporation the right to buy and sell property, enter legal contract, and to sue and be sued.

The 4th disadvantage of a corporation are subject to more ________ ________, than any other form of business

Government regulation

Is a corporation hard or easy to start?

Hard

(Merger types) takes place when 2 or more business's that produce the same kind of products, join forces.

Horizontal merger

A report showing a business's sales, expenses, and profits for a certain period of time.

Income statement

Most businesses use a _______ _______.

Income statement

A stock of finished goods and parts in reserve on hand?

Inventory

What is the 3rd advantage of a partnership?

Lack of special taxes levied on a partnership

Partnerships are the _________ _________ form of business organizations.

Least numerous

When companies merge, one company gives up its Seperate ______ ______.

Legal Identity

Sole proprietorships are the easiest form of business to start because it involves almost no requirements except for the occasional business __________and _________.

License and fees

In the case of a limited partnership, partners have ______ liability to the business.

Limited

The 3rd advantage of a corporation is that the corporation provides _______ _____ __ ___ _________.

Limited liability for its owners

A 5th disadvantage of a sole proprietorships is that is has _________ _________, which means that the company legally ceases to exist when the owner dies, quits, or sells the business.

Limited life

the company legally ceases to exist when the owner dies, quits, or sells the business?

Limited life

In a ________ ________, at least 1 partner is not active in the daily running of the business, although he or she may have contributed fun in order to finance operation.

Limited partnership

The 2nd advantage of a sole proprietorship is the relative ease of ______________.

Management

A 4th disadvantage of a sole proprietorship is that is often has limited __________ __________.

Managerial experience

General Motors (GM), British Petroleum (BP), Royal Dutch Shell (Shell), SONY, are all examples of global corporation that have attained worldwide economic importance. What are these examples of?

Multi national corporation

Other large corporation, have become international in scope. _______ _______ ________, is one that have manufacturing, and or service operation in a number of different companies.

Multi national corporation

What does a charter state?

Name of company, address, purpose of business, ant other features of the company

MultiNationals, are usually welcome on any continent because they transfer new technology and generate ____ _____.

New jobs

Other organizations, include: __________, _________ and ______ ________.

Non-profits, community, and civic organizations

Preferred stock represents the _______ __________ ________, share of the corporations.

Non-voting ownership

The charter also specifies the number of share ___________________________________.

Of stock or ownership certificates in the company

A business jointly owned by 2 or more individuals?

Partnership

The price paid for the use of another individuals money

Pay interest

The amount borrowed is known as the _________.

Principal

The board of directors, also hires a ________ ________ ________, to run the business on a daily basis.

Professional management team

The 2nd advantage of a corporation is the directors of the corporation can hire ___________ ____________ ___ _____ ____ _____.

Professional managers to run the firm

An example of a conglomerate is that in the 1990's, when RG Reynolds Tobacco Company, bough Nabisco Wriggly Gum, and Lifesavers. The new company then became known as ________.

RJR Nabisco

What are the 2 ways that a business can grow in?

Reinvesting some of its profits back into the company and expand by engaging in a merger

These expenses include: the cost of any goods, such as inventory; salaries and wages paid to employees, interest payments on loans, ____________________________.

Rent and utilities and depreciation

The corporation must also register with the federal ____.

SEC

Corporation must register with the _______ ___ _______, Odin the state in which there are a charter.

Secretary of State

The ease of transferring ownership is also anther strength of the corporation. If a share holder no longer wants to be an owner, he or she simply ________________________________.

Sells the stock to someone else who then becomes the new owner

A corporation is a form fo business organization recognized by the law, as a __________ ______ _________, having all the rights of an individual.

Separate legal entity

A 3rd advantage of a sole proprietorship is that the owner enjoys the profits from the business, without having to _______________________.

Share them with others

A 3rd disadvantage of a sole proprietorship is that of _______ and _______.

Size and efficiency

What is the most common form of business organization in the United States today?

Sole Propreitorship

What are the 3 main forms of business organizations in the economy today?

Sole proprietorship, partner ship, the corporation

Most economist, believe in the low cost production and quality that competition in the global economy brings. They also believe, a greater use of research and new technology will raise the ________________________.

Standard of living for all new people

The shares certified by the charter are then sold to investors called _________ or _________.

Stock holders or share holders.

What is taxation?

Stockholders dividends are taxed twice

The 3rd disadvantage of a corporation is double ______ of any corporate profits

Taxation

What odes limited liability for its owners mean?

The corporation itself, not its owners, are fully responsible for all debts and obligations

The 1st main advantage fo a corporation is _____ ____ ____ ________ _______ __________>

The ease of raising financial capital

What does proffesional managers running the firm mean?

The owners or stockholders can still hold a portion without having to know a great deal about it

The 2nd disadvantage of a corporation is the owners or share holders have little say in how the business is run after _____ ____ ____ ____ ____ ___ ___ ______.

They have voted for the board of directors

All partners are responsible for the management and financial obligations of the business? True or false?

True

Are stock holders and share holders the same?

True

Diversification is one of the main reasons for conglomerate mergers. (True or false)

True

The first advantage of a sole proprietorship is the ease of starting up the business? True or False?

True

One main disadvantage of a sole proprietorship is that the owner has ____________ __________.

Unlimited liability

________ _________, means that the owner is personally and fully responsible for all loses and debts of the business.

Unlimited liability

(Merger types) when firms involves in different steps of manufacturing or marketing join together

Vertical merger

What is a merger?

a combination of 2 or more businesses to form a single company

A sole proprietorship is owned by _____ individual?

1

The owner of a common stock usually receives __ vote for each stock purchases.

1

In the United States, corporations account for approximately ____ of the business's and about _____% if all sales.

1/5, 90

Finally; a company may use a merger in order to lose its corporate identity. An example is in 1997, ValueJet merged with Airways, to form AirTran Corporation. The new company, flew the same planes, on the same routes, as the original company. The AirTran hoped that the name change, would help the public forget ValueJet's trading _____ ______.

1996 crash