Business Organization
what risks do limited partners face that general partners do not? a. complete dependence on business abilities of others b. necessity of meeting rigid operational standards c. need to report earnings from business as income d. possibility of having personal assets used to meet business obligations
A
the owner of a factory that manufactures clothing buys several clothing stores to sell the clothing the factory produces. this is an example of a. a horizontal merger b. a vertical merger c. a conglomerate d. a multinational corporation
B
the portion of corporate profits paid out to stockholders a. dividends b. assets c. stocks d. bonds
A
which advantage of a sole proprietorship could also be a disadvantage? a. a sole proprietor has full control b. a sole proprietor can easily start a business c. a sole proprietor is the sole receiver of profits d. a sole proprietor has to follow relatively few regulations
A
which of these is an advantage that general partners alone enjoy in a limited partnership? a. control of business operation b. limited liability c. share of investment d. share of profits
A
why is it easy to start a sole proprietorship? a. sole proprietors do not need to file a lot of paperwork to start a business b sole proprietors are not subject to zoning laws c. sole proprietors do not have any legal obligations d. sole proprietors do not need to follow any government regulations
A
a publicly held corporation has a. no legal identity beyond that of its own b. may shareholders who can buy or sell its stocks c. a few stockholders who are often family members d. stockholders who rarely trade their shares of stock
B
according to the corporate structure, who runs corporation and oversees its daily operation? a. the stockholders b. the CEOs c. the employees d. the managers
B
what does the board of directors in a corporation do? a. work in the various department of the corporation b. make all major decisions for the corporation c. run the corporation and oversee its operations d. own the corporation
B
which is an example of a sole proprietor having personal liability? a. a vet requiring that customers pay for an office visit on the day of the visit b. a store owner having to pay back a business loan after going out of business c. a bike mechanic purchasing some new tools d. a caterer taking time off for a vacation
B
which statement about sole proprietorships is true? a. sole proprietorships can be owned by more than one person b. sole proprietorships are the most common form of business organization in the United States c. sole proprietorships generate about 40% of all sales in the United States d. sole proprietorships do not have to pay employment taxes
B
why would someone be willing to share the economic right to business ownership by forming a general partnership? a. to benefit from being connected to a well-known brand name b. to enjoy a greater share of profit c. to limit liability d. to avoid paying paying additional income tax
B
if a business had $150,000 in business losses, and your business is a limited partnership, which of the following is true? a. the business loss would be divided equally amongst all partners, general and limited b.the business loss would be divided equally amongst the limited partner only c. the business loss would be divided equally amongst the general partners only d. the business loss would be taken on by the business and all partners would be spared
C
what does a partner in a limited liability partnership have that a limited partner in a limited partnership does not have? a. business involvement b. investment in the partnership c. limited liability d. share of profit
C
what happens to the stockholders when a corporation files for bankruptcy? a. the stockholders must also file for bankruptcy b. the owners can force the board of directors to pay the debt c. the owners can lose only the money they have invested d. the owners can avoid paying the debt by forming a limited liability corporation
C
why is liability the biggest disadvantage of a sole proprietorship? a. the owner may not be able to complete work on time b. the owner might be unable to pay his or her employees c. the owner could lose personal property of the business fails d. the owner may have difficulty getting loans from banks
C
how do corporations raise capital? a. by transferring funds from the owners to the investors b. through grants from the board of directors c. by taking out loans against the owners' assets d. by selling stocks and bonds
D
how does a lack of financial resources for fringe benefits affect a sole proprietor's ability to run a business? a. it makes it difficult for the owner to make a profit b. it makes it difficult for the owner to promote the business c. it makes it difficult for the owner to pay competitive wages d. it makes it difficult for the owner to attract good employees
D
in order to do business, what is one regulation that corporations have to follow? a. they have to form limited liability corporations b. they have to have an advisory board that makes financial decisions c. they have to sell stocks and bonds on the stock exchange d. they have to file quarterly and annual reports with the SEC
D
what is an advantage that the general partners who won a partnership have that the owner of a sole proprietorship may not have? a. no need to follow government regulations b. better access to capital c. ease of start-up d. ability to collaborate with an equal
D
which is a disadvantage of sole proprietorships? a. full control b. few regulations c. easy to start and end d. limited access to resources
D
which of the following statements about corporations is most likely true? a. corporations are 60% of all businesses created, but generate only 20% of all net income b. corporations are 10% of all business created, but generate only 15% of net income c. corporations are 70% of all business creates, but generate only 10% of net income d. corporations are 20% of all business creates, but generate only 60% of net income
D
which type of business organization suffers from a lack of permanence? a. sole proprietorship b. partnership c. corporation d. both a and b
D
why might a limited partnership have a greater ability to raise capital than a general partnership? a. increased access to corporate funds b. increased probability of corporate acquisition c. increased shared profits with more investors d. increased attractive due to limits on liability
D
sole partnership
a business owned and managed by a single individual
stock
a certificate of ownership in a corporation
certificate of incorporation
a license to form a corporation issued by a state government
corporation
a separate legal entity, owned by individual stockholders
limited liability corporation
a type of business with limited liability for the owners, with the advantage of not paying corporate income tax
limited liability partnership
a type of partnership in which all partners are limited partners
general partnership
a type of partnership in which all partners share equally in both responsibility and liability
liability
legal obligation to pay debts
fringe benefits
payment of employees other than wages or salary
assets
the money and other valuables belonging to an individual or business