Test Two BUSI 1305

A(n) _____ is a form of business ownership that offers both restricted responsibility to its owners and flexible tax treatment.

limited liability company

Ronald, Jamie, Ben, and Joseph are colleagues who want to start a company of their own. All of them want to be actively involved in managing the business. However, they do not want any personal liability for any debts incurred by the company. In this scenario, they should most likely get involved in a _____.

limited liability partnership

Technological tools such as the Internet and email have:

made it easy for small business owners to manage their firms on the go.

In the context of small business opportunities, because of their size, many small firms can:

offer personal customer service.

A(n) _____ is a voluntary agreement under which two or more people act as co-owners of a business for profit.

partnership

Julian wants to open a bakery. He uses his savings and borrows some funds from his family to start his business. In the given scenario, Julian uses _____ to fund his business.

personal resources

A(n) _____ can operate under simpler arrangements than conventional corporations.

statutory close corporation

Carla and Liang both have shares in HD&Z Corporation, a C corporation that offers limited liability to all its owners. In this context, Carla and Liang are the _____ of HD&Z Corporation.

stockholders

An advantage of franchising is the:

training and support provided by the franchisor.

Which of the following is an example of an institutional investor?

A mutual fund

Who among the following people is most likely to become a necessity entrepreneur?

A person who experiences discrimination in the standard workplace

A _____ is a form of business ownership in which the business is considered a legal entity that is separate and distinct from its owners.

Corporation

_____ is the process of funding ventures by raising money from a large number of investors via the Internet.

Crowdfunding

Which of the following is an issue associated with general partnerships?

Difficulty faced by a partner when withdrawing from the company

A _____ is a type of franchising arrangement in which the franchisor makes a product and licenses the franchisee to sell it.

Distributorship

Lester owns a small law firm and has a 10-hour workday. Despite keeping long hours, he is open to working on weekends and holidays if required. He also responds to late-night calls from clients. Which of the following entrepreneurial characteristics is highlighted in the given scenario?

Energy

Which of the following statements is true of the formation of general partnerships?

Expert legal assistance can be acquired when drawing up a partnership agreement.

Neman, a single parent, quit his job and started a small independent business because he was unable to give adequate attention to his child. Being an entrepreneur gives him the freedom to give undivided attention to his child without jeopardizing his work. Which of the following advantages of entrepreneurship is highlighted in the given scenario?

Flexibility

_____ are local offices—affiliated with the U.S Small Business Administration—that provide comprehensive management assistance to current and prospective small business owners.

Small Business Development Centers

Which of the following is an advantage of starting a business from scratch?

You do not have to deal with a prior owner's bad decisions.

In the context of opportunities and threats, overhead costs for small businesses:

are often lower than big companies.

In the context of the U.S. economy, small businesses:

are often the first to contract when times are tough.

A(n) _____ is a combination of two firms that are in unrelated industries.

conglomerate merger

In a sole proprietorship, any debts the company incurs are:

considered to be the owner's personal liabilities.

The basic rules governing how a corporation is organized and how it conducts its business are known as _____.

corporate bylaws

A _____ is a form of business ownership in which the business is considered a legal entity that is separate and distinct from its owners.

corporation

Small business start-ups are likely to find that getting commercial loans are:

difficult because lenders are reluctant to give loans to firms that do not have a track record.

Samuel and Dexter start a logistics company together. Both of them have an equal right to participate in the company's management and share in the company's profits. In this scenario, Samuel and Dexter most likely _____.

have a general partnership

Unlike a sole proprietorship, a corporation:

is considered to be a legal entity that is separate and distinct from its owners.

_____ is a deep-seated sense that forces other than the individual are responsible for what happens in his or her life.

An external locus of control

Which of the following is a threat that a small business is most likely to face?

High risk of failure

Which of the following statements is true of a limited liability company (LLC)?

It is by far the most common type of business organization in the United States.

In the case of C corporations, shareholders don't pay income taxes on _____.

Non-operating incomes

Which of the following categories of people is most likely to step into entrepreneurship?

People who have trouble being subordinates because of their personalities

Which of the following is one of the reasons why many people prefer a sole proprietorship?

Pride of ownership

Which of the following is a disadvantage of franchising?

The franchise agreement usually requires the franchisee to follow the franchisor's procedures to the letter.

Identify a true statement about angel investors.

They invest in promising start-up companies because they want to make money for themselves.