BUS 120

The most common use of a business plan is to persuade lenders and investors to finance the venture.

True

A _____ is a formal written statement that describes in detail the idea for a new business and how it will be carried out.

business plan

Once the business plan is finished, the next step is to:

find financing for the business

_____ financing is a form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period.

Debt

Which of the following is a disadvantage of sole proprietor ownership?

Difficulty in raising capital

Entrepreneurs, as a general group, dislike risk taking.

False

What type of business organization generates the most total sales?

Corporation

A type of business entity that provides liability protection but is taxed like a partnership is a:

S corporation

A corporation's board of directors:

Sets major corporate goals and policies

Which of the following is NOT one of the advantages of owning a small business? 1. flexibility 2. efficiency of operation 3. ability to serve specialized markets 4. avoidance of taxes

avoidance of taxes

A _____ merger brings together companies in unrelated businesses to reduce risk.

conglomerate

The two forms of business financing are _____ (borrowed funds) and _____ (ownership funds).

debt; equity

A corporation's earnings are taxed as corporate earnings and as dividends to the stockholders. This is known as:

double taxation

The person who takes the risk of starting and managing a business to make a profit is called a(n):

entrepreneur

Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care information. During the development of this high-growth company, Arnold and Bradford attracted a group of investors who purchased stock in their company and provided them with ______ financing.

equity

The Small Business Administration (SBA) offers a broad range of aids to small businesses. They include:

guarantees on loans made by private lenders

The franchise agreement:

is the contract that details the terms of the franchise

Partnership agreements generally specify all of following EXCEPT: 1. contributions of each partner 2. management responsibilities 3. provisions for senior partnership interests 4. methods of taxation of each partner

methods of taxation of each partner

The most common form of business organization is the:

sole proprietorship

.Articles of incorporation do NOT include: 1. the name and address of the corporation 2. a list of all stockholders' names 3. the objectives of the corporation 4. the minimum capital requirements

2. a list of all stockholders' names