Business Questions: 1.2

Which of the following is not a disadvantage of partnerships? A. Financial resources are pooled B. Partners have unlimited liability C. Profits are shared with all partners D. Conflicts in decision-making are more likely to occur

A. Financial resources are pooled

Which of the following is not an advantage of a partnership? A. Larger amounts of capital can be raised by selling shares to friends and family B. There is greater continuity compared with sole traders C. There is a greater wealth of knowledge and expertise than setting up as sole traders D. Corporate confidentiality is relatively high as financial statements do not have to be released to the public

A. Larger amounts of capital can be raised by selling shares to friends and family

Which of the following is not a characteristic of partnerships? A. Limited liability for all members B. A deed of partnership is drawn out C. Shared control, ownership and profits D. Greater continuity

A. Limited liability for all members

The Public sector is owned and controlled by A. The government B. Individuals and households C. Shareholders D. The general public

A. The government

Which of the following is not a valid advantage of a sole proprietorship? A. The proprietor has limited liability B. The proprietor has total control and more flexibility C. Fewer legal formalities are required D. The proprietor does not have to share profits with others

A. The proprietor has limited liability

Which of the following is not a characteristic of a cooperative? A. They are non-profit social enterprises B. They can be consumer, worker or producer cooperatives C. They aim to create value for their members in a sustainable manner D. They are democratically controlled

A. They are non-profit social enterprises

Which of the following are advantages of public-private partnerships (PPPs)? i. PPPs are typically more efficient than government operated organizations ii. Combining private and public funds helps eliminate funding shortfalls iii. There is a large opportunity cost involved in using government funds iv. There are conflicting interests between the profit-driven private sector entity and the service-motivated government entity A. i + ii B. i + ii + iii C. ii + iv D. iii + iv

A. i + ii

Small, low-interest loans may be provided to low-income individuals who would not otherwise have access to funds from traditional lenders like banks to improve their standards of living. What is this called? A. Grants B. Microfinance C. Cooperative financing D. Subsidies

B. Microfinance

Which of the following is not an example of a for-profit social enterprise? A. Micro-financiers B. Non-governmental organizations C. Cooperatives D. Public-private partnerships

B. Non-governmental organizations

If an individual wants full and total control over a firm and wishes to minimize the legal bureaucracy in setting up, which of the following is most suitable? A. Partnership B. Sole proprietorship C. Private limited company D. Public limited company

B. Sole proprietorship

Who do the profits made by a sole trader belong to? A. The government B. The sole trader C. Employees D. Shareholders

B. The sole trader

Which of the following is not a disadvantage of a non-profit social enterprise? A. They may be relatively inefficient B. They receive tax exemptions and incentives C. There is a risk of fraud D. There is significant bureaucracy involved

B. They receive tax exemptions and incentives

Which of the following is not a feature of a public limited company? A. They have undergone an initial public offering (IPO) B. Shares are sold and traded through a stock exchange C. It can have up to 20 shareholders D. Financial statements must be released to the public

C. It can have up to 20 shareholders

Which of the following is not an advantage of private limited companies? A. Lenders will be more willing to lend them funds compared to unincorporated businesses B. The separation of ownership and control provides limited liability to shareholders C. It is easy to raise large amounts of additional share capital D. Since the firm and the owners are separate legal entities, there is greater continuity

C. It is easy to raise large amounts of additional share capital

Which of the following is not a characteristic of a company (corporation)? A. There is a separation of ownership and control B. Shareholders have limited liability C. Profits are distributed amongst managers and directors D. They can be either privately or publicly owned

C. Profits are distributed amongst managers and directors

Which of the following is not an example of a non-profit social enterprise? A. Charities B. Non-governmental organizations (NGOs) C. Public-private partnerships (PPPs) D. All of the above

C. Public-private partnerships (PPPs)

Which of the following is not a disadvantage of being a sole trader? A. Unlimited liability B. Limited availability of, and access to, funds C. Time consuming to set up D. Continuity challenges

C. Time consuming to set up

Which of the following are advantages of a cooperative? i. They are socially desirable ii. The democratic system incentivises employees iii. Members have limited liability iv. It is easy to attract new members because financial returns are substantial A.ii + iii B. i + iii C. i + ii + iii D. ii + iii + iv

C. i + ii + iii

Which of the following are advantages of a public limited company? i. Large amounts of share capital can be raised to fund expansion ii.Raising external finance is easier as being a listed company attracts investors iii.There is greater continuity than in unincorporated firms iv.They have a high degree of privacy A. i + ii B. ii + iii C. i+ii+ iii D. ii + iii + iv

C. i+ii+ iii

Which of the following is/are disadvantage(s) of public limited companies? A. Disclosure of financial statements to the general public B. High costs of compliance to stock exchange requirements C. Heightened threat of a takeover D. All of the above

D. All of the above

Which of the following is not a feature of a private limited company? A. Shares cannot be traded on a stock exchange B. Transfer of ownership has to be agreed upon by all shareholders C. Shares are usually sold to friends and family D. An initial public offering has to be made after formally registering the business

D. An initial public offering has to be made after formally registering the business

What does limited liability refer to? A. Shareholders' personal assets cannot be claimed by creditors for money owed by the firm B. The maximum a shareholder can lose is equal to their initial investment, but nothing more C. The directors are exempt from adhering to company law and legislation D. Both (A) and (B)

D. Both (A) and (B)

Which of the following is not a disadvantage of private limited companies? A. Disclosure of financial statements may be required B. Shares cannot be sold publicly on a stock exchange C. There are more legal formalities compared to an unincorporated business D. Certain shareholders have unlimited liability

D. Certain shareholders have unlimited liability

Which of the following is not a for-profit organization? A. Public-private partnerships B. Sole traders C. Limited liability companies D. Non-governmental organizations

D. Non-governmental organizations

What is it called when an organization is owned and controlled by both the government and a private sector firm simultaneously? A. Cooperative B. Non-profit social enterprise C. Limited liability company D. Public-private partnership

D. Public-private partnership