entrepreneurship ch 7 test review

bans the sale of impure, improperly labeled, falsely guaranteed, and unhealthful foods, drugs and cosmetics

FDA

the antitrust legislation that makes it illegal for competitors to set prices is the

Sherman act

what is not included in a partnership agreement

how dividends should be distributed

a limited liablity company

is not subject to the rules for an S corporation

a business is a sole proprietorship

it is owned execlusively by one person

the individual or group that owns the most shares of stock in a corporation

maintains control of the company

franchisors may offer

management and technical training

when buying a business, you should...

meet with the seller, inspect the business during working hours, have a lawyer draw up the sales contract

a disadvantage of a sole propreitorship is that

only the owner crontributes money

the purpose of the _______ agreement is to set down in writing the rights and responsibilities of each of the owners

partnership

a document that gives legal rights to inventors is a ____________

pat & pending

gives an inventor the sole right to produce

patent laws

you can learn about laws that affect your business

reading books, taking a course in business law, the internet

this law makes it illegal to charge different prices to different groups of nonretail consumers

robinson-patman act

makes it illegal for competitiors to get together and set prices on the products and services they sell

sherman act

the most common legal form of business in the united states is a

sole propreitorship

the operating costs of a franchise include an initial franchise fee, ________, royalty fees, and advertising costs

startup costs

an advantage to buying an existing business is that it already has customers, ___________, and procedures

suppliers

an advantage of buying an existing business is that

suppliers are lined up

what is a disadvantage of working in a family business

the distinction between business life and private life is blurred

when buying an existing business, you should analyze financial accounting reports of operations for at least ...

three years

brand names may have a _________, which means that the name, symbol, or special mark can be used only by the business

trademark

states the names, symbols, or special marks that distinguish certain businesses can be used only by the business

trademark law

laws that protect businesses involve

trademarks

a disadvantage of buying an existing business is that it may be poorly located

true

a franchisee is a person who purchases a franchise agreement

true

a partnership agreement identifies the investment contributed by each partner

true

an S corporation profits are taxed only as individual income, not as corporate income

true

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

true

in a partnership, any looses will be shared by all the partners

true

one of the most common reasons that a business hires a lawyer is to assist with contracts

true

people who own shares of stock in a corporation are the owners of the corporation

true

the consumer product safety act of 1972 sets safety standards for products other than food and drugs

true

the franchise disclosure document helps the franchise buyer make a knowledgeable purchase

true

the government exercises very little control over sole proprietorship

true

the original, creative work of an artist or inventor is called intellectual property

true

the owner of a business may sell the business because of insufficient sales or profits

true

the wheeler-lea act bans unfair or deceptive actions or practices by businesses

true

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

true

this law requires all banks to calcuate credit costs in the same way

truth-in-lending act

the law that bans false or misleading advertising

wheeler-lea act

bans unfair or deceptive actions or practices by businesses

whellier act

regulations that control what types of buildings can be built in what areas

zoning laws

restrictions on where businesses can locate are

zoning laws

in a corporation, each share of stock is

a unit of ownership in the company

you should be suspicious when buying a franchise if the franchisor refuses to provide

a written financial statement

the amount paid for the right to run a franchise is

an initial franchise fee

what makes monopolies in a certain industry illegal

antitrust laws

this means the parties to a contract are legally able to enter into a binding agreement

capacity

you can find a business for sale through

classified ads, leasing agents, bankers

states that is illegally for a business to require a customer to purchase one good in order to be able to purchase another good

clayton act

sets safety standards for products other than food and drugs

consumer protection

establishes rights to exclusive publication, production, sale, or distribution of a literary or artistic work

copy right

a business with the legal rights of a person and which may be be owned by many people is a

corporation

ownership of a _________ is in the form of shares of stock

corporation

an advantage of a partnership is that

decision making and responsibilites are shared

the board of directors of a corporation

determines the salaries of the senior officers

every corporation has a board of _______, which is a group of people who meet several times a year to make important decisions affecting the company

directors

________ are distributions of corporate profits to the shareholders

dividends

helps consumers correct credit card billing errors

fair credit billing act

a business broker is a person who sells homes for a living

false

a corporation pays taxes both on its income and on the amount it pays out in divdends

false

a corporations senior officers decide how much should be paid out in dividends

false

a sole proprietorship enables two or more people to be in control of a business

false

a valuator can help determine a price to offer a business and can write a sales contract

false

advertising fees for franchises are paid directly to the advertisers

false

although recommended, it is not necessary to consult an attorney before purchasing a franchise

false

consideration occurs when one party in a contract offers or agrees to do something and the other party accepts

false

copyrights remain in effect for 20 years after the death of the author

false

regulations that protect concumers include trademarks, zoning regulations, and consumer protection laws

false

the antitrust division of the FTC takes legal action aganist any business it believes has tried to monoplize an industry

false

the clayton acts makes it illegal for competitors to get together and set prices on the products or services they sell

false

the owner of a franchise must pay a weekly or monthly royalty fee to the seller of the franchise

false

you must file a written description of your business with the government when you raise money for a sole proprietorship

false

before buying an existing business, you should analyze the ________ for at least the past 3 years

financial records

if a franchise fails to make royalty payments, the franchisor can terminate the ________

franchise agreement

you may want to pay a lawyer to

give you advice on insurance coverage