Business 101 exam 2
Which of the following are advantages of sole proprietorships?
- Because all earnings are treated as personal income, the only taxes that need to be paid are the individual federal, state and local income taxes. - The owner has complete decision-making control of the business operations - The sole proprietor keeps all of the profits if the business is successful.
Which of the following are disadvantages of corporations
- double taxation - difficult/expensive to set up - additional gov regulations
Which of the following are advantages of franchises
- established brand name - support from franchisor - access to capital - national advertising
Which of the following are purposes of the World Trade Organization?
- facilitate a harmonious flow of global trade - maintain lower political barriers to trade - provide a forum for nations to negotiate the rules of international trade - settle disagreements related to the implementation of trade agreements
Which of the following are disadvantages of franchises
- initial/ongoing fees - rules/regulations - limited control/flexibility - maintain continuity
Which of the following are advantages of corporations
- limited liability for shareholders - raise funds - transfer of ownership - longevity - ease of attracting human capital
franchisor is franchisee is
- owner of the trademark - buy the right to use the trademark
limited partnerships
- shared profits/losses - joint ownership - no involvement in decision making - limited liabilty
in corporations
- shareholders avoid liability - corporations liable for debt/liabilities
general partnerships
- shares profits and losses - joint ownership - shared financial responsilbity - shared running of business - unlimited liability
reasons why countries pursue in trade protection
- to protect domestic jobs - to protect small domestic companies - to remove any price advantage a foreign good may have in the domestic marketplace
Which of the following are disadvantages of sole proprietorships?
- unlimited liability (have burdens, personal assets at risk) - hard to raise funds - hard to attract human capital (employees) - lack of permanence
disadvantages of partnerships
- unlimited liability for general partner - risk of disagreement - difficult to end
difference between s and c corporation
An S corporation is limited to no more than 100 owners, while a C corporation may have an unlimited number of owners.
c corporations s corporations
c - double taxation s - avoid corporation tax, tax like partnership
Which of the following are advantages partnerships
combined skills, easy to start up, no double taxation, share profits/losses
contract manufacturing
entering into contract, you own factory, but original firm owns goods
Firms are able to access global markets through which one of the following techniques?
franchsies
foreign direct investment
high risk, high reward, avoid costs and tariffs
The general openness of a country to trade can be seen by
looking at the sum of exports and imports as a share of the country's gross domestic product.
what % are partnerships and what % do they account for in sales in U.S
make up 10% , 15% in sales
what % are coproations and what % do they account for in sales in U.S
make up 20% , accounts for 80% of sales receipts
what % are sole proprietorship and what % do they account for in sales in U.S
make up 70% , less than 5% in sales
international franchising
produce and sell goods in another country with exporting the good
a ___ is an owner of a corporation
shareholder
A positive balance of trade is also known as a
trade surplus
One of the potential drawbacks of international trade is the loss of a national identity as a divergence grows between those who benefit from trade and those who don't.
true
Safety or environmental regulations often serve as non-tariff barriers to trade
true
The balance of trade measures whether a country exports more to other countries or imports more from other countries
true
you want more exports than imports
true
