7.1&7.2
a corporation's senior officers decide how much should be paid out in dividends
F
a corporations pays taxes both on its income and on the amount it pays out in dividends
F
a disadvantage of owning a franchise is that equipment and supplies can be more expensive because you must buy them from the franchisor
F
a valuator can help determine a price to offer for a business and can write a sales contract
F
although recommended, it is not necessary to consult an attorney before purchasing a franchise
F
copyrights remain in effect for 20 years after the death of the author
F
regulations that protect consumers include trademarks, zoning regulations, and consumer protection laws
F
the Clayton act makes it illegal for companies to get together and set prices on the products or services they sell
F
the antitrust division of the FTC takes legal action against any business it believes has tried to monopolize an industry
F
the initial franchise fee may be $100,000 and is usually refundable
F
the owner of a franchise must pay a weekly or monthly royalty fee to the seller of the franchise
F
there are 2 main types of ownership arrangement
F
you must file a written description of your business with the government when you raise money for a sole proprietorship
F
a business broker is a person who sells businesses for a living
T
a disadvantage of buying an existing business is that it may be poorly located
T
a franchisee is a person who purchases a franchise agreement
T
a partnership agreement identifies the investment contributed by each partner
T
a partnership agreement must be written by a lawyer and filed with your local government
T
an S corporation's profits are taxed only as taxed as individual income, not as corporate income
T
during the period a patent is in effect, no business or individual can copy or use the patented invention without permission from the patent holder
T
in a partnership, any losses will be shared by all the partners
T
people who own shares of stock in a corporation are the owners of the corporation
T
the government exercises very little control over sole propietorships
T
the owner of a business may sell the business because of insufficient sales or profits
T
the wheeler-lea act bans unfair or deceptive actions or practices by businesses
T
when purchasing an existing business, you should find out why the business is being sold, inspect the facility, and analyze the financial accounts for the last three years
T
when buying an existing business you should analyze financial accounting reports of operations for at least... a. 1 year b. 2 years c. 3 years d. none of these
c. 3 years
in a corporation, each share of stock is... a. sold by a director of the company b. used to determine the amount of income tax c. a unit of ownership in the company d. a liability
c. a unit of ownership in the company
a business with the legal rights of a person and which may be owned by many people as a a. sole proprietorship b. partnership c. corporation d. dual partnership
c. corporation
which of the following is not a disadvantage of owning a franchise? a. franchises can cost a lot of money b. franchise owners must charge set prices c. franchise owners can benefit from the success of other franchises d. the franchise owner may not have the franchise agreement renewed
c. franchise owners can benefit from the success of other franchises
which of the following is not included in a partnership agreement? a. names of the partners b. conditions under which the partnership can be dissolved c. how dividends are to be distributed d. procedure for dealing with the death of a partner
c. how dividends are to be distributed
when buying a business, you should do all of the following except... a. meet with the seller b. inspect the business during working hours c. inspect a list of all customers d. have a lawyer draw up the sales contract
c. inspect a list of all customers
a limited company... a. cannot be formed by a single owner b. is not subject to the rules for an S corporation c. provides more tax benefits than an S corporation d. all of these
d. all of these
you can find businesses for sale through... a. classified ads b. leasing agents c. bankers d. all of these
d. all of these
the individual or group that owns the most shares of stocks in a corporation... a. is liable for all corporate debts b. is called the board of shareholders c. receives all the profits d. maintains control of the company
d. maintains control of the company
franchisors may offer... a. to help finance the purchase b. to waive the royalty fees c. free nationwide advertising d. management and technical training
d. management and technical training
a disadvantage of a partnership of a sole proprietorship is that... a. it must remain small b. it is difficult to start c. government regulation is extensive d. only the owner contributes money
d. only the owner contributes money
the amount paid for the right to run a franchise is... a. an initial fee b. a startup cost c. a royalty fee d. an advertising fee
a. an initial fee
a business is a sole proprietorship if... a. it is owned exclusively by one person b. it has fewer than 10 employees c. it has the legal rights of a person d. all of these
a. it is owned exclusively by one person
the most common legal form of business in the U.S. is... a. sole proprietorship b. S corporation c. partnership d. limited liability company
a. sole proprietorship
you should be suspicious when buying a franchise if the franchisor refuses to provide... a. written financial statements b. free advertising c. training or classes d. oral promises
a. written financial statement
an advantage of a partnership is that... a. government regulations prevent disagreements b. decision making and responsibilities are shared c. it is easy to raise capital d. it has the legal rights of a person
b. decision making and responsibilities are shared
the board of directors of a corporation... a. sets up the companys accounting procedures b. determines the salaries of the senior officers c. pays dividends to shareholders d. may be held liable for all company debts
b. determines the salaries of the senior officers
an advantage of buying an existing business is that... a. there will not be any customer goodwill b. suppliers are lined up c. it is making a profit d. less capital is required
b. suppliers are lined up
