4: Section 3: Business Types (All Practice Checkpoints)

Hector takes orders for custom cakes and then bakes, decorate, and delivers them to events in his area

Operate

Ronnie's company produces cakes and cookies, so he has a team that focuses on cakes, and another team that focuses on cookies.

Product

Pablo keeps tracks of the amount of money earned by his company and compares it to the amount spent.

Finance

Dave is the only manager in his gift basket assembly company, and he manages all of his employees directly. Which type of organization does this best describe?

Flat

Kana works on the writing team of a large company, in a group of writers who share the responsibility for writing for many different purposes.

Function

Minh helps new employees with their hiring paperwork.

HR

Arpita works for a company that produces children's toy blocks, and her team applies the paint to the blocks just before they are completed.

Process

Emil drives an airport shuttle van.

Production

Joaquin pays for renters' insurance so that he will get paid if his belongings are destroyed in an accident or burglary.

Unsought good

Isaiah works for a car dealership that sells cars to individual buyers.

Retail

Robyn wants to turn her sole proprietorship as a tutor into a larger company with many owners and liability protection. She is willing to deal with double taxation and a complicated setup process.

C corporation

Match the examples in Column A to the types of goods in Column B. Omar buys a snack bag of chips that he noticed while waiting in line at the store.

Convenience impulse good

Jamie goes to the store to buy toothpaste.

Convenience staple good

Match the description in Column A to the business structure type in Column B. A company with multiple owners, limited liability, and higher taxes.

Corporation

Alonzo hires three different teams for selling men's, women's, and children's shoes.

Customer

Fatima is responsible for handling customer complaints.

Customer Service

Keesha decides to sell her indoor rock climbing center business to larger company.

Exit

Gabriel operates a machine that transports rocks in a rock quarry.

Extractive

Joanna goes fishing and catches a trout.

Extractive

Kevin works in a copper mine.

Extractive

Tanesha works on an oil drilling rig.

Extractive

As part of her business plan research, Tiara researches the target market for her outdoor survival classes.

Plan

Jackson maintains the company's computer system

IT

Kazuhiro opens a second kite store in a different town than the first one.

Improve

A company with multiple owners, limited liability, and pass-through taxation.

LLC

Isabel owns a chain of smoothie stands, and she hires a different manager for each stand.

Location

Classify the following example as extractive or manufacturing. Mariam operates a machine that weaves rugs.

Manufacturing

Jordan creates and sells hand-made tote bags.

Manufacturing

Kenji works in a mill that turns wheat into breakfast cereal.

Manufacturing

Vincent designs and prints greeting cards.

Manufacturing

_______________ is when most potential customers for a product already have something that satisfies that need or want. (Select the best answer.)

Market saturation

Kayla makes flyers to promote her dance classes.

Marketing

If you decided to be a franchisee and open a franchise of an existing company, which things would you expect the franchisor to provide for you? (Select four answers.)

Marketing methods, A business model, Trademarked materials, Brand image

Ming is starting a business with the purpose of fighting hunger in her community. She doesn't care about making a profit and is willing to reinvest any income back into her products and services.

Nonprofit corporation

Abby sees that vintage used clothing is becoming popular in her school, so she decides to start a business that buys and resells used clothes.

Operate

A company with multiple owners, personal liability, and pass-through taxation.

Partnership

Doug and Vanessa want to start a carpet cleaning business together and share the ownership and profits. They are not concerned about personal liability. They want the business to be fairly simple to set up.

Partnership

Which of the following is true in regard to taxation of a C corporation?

Pass-through taxation

Classify the following example as wholesaling or retailing. Nadia buys candy in bulk and resells individual packages of candy to her friends.

Retail

Petra orders a large quantity of hats printed with a popular sports team's logo, and then resells them individually in her sports store.

Retail

Sergio works at an electronics store that sells cell phones, cameras, and stereo equipment.

Retail

Cuba is starting an event planning company. He wants to protect his liability, and he would prefer pass-through taxation.

S corporation or LLC

Wanda reads reviews of different video cameras to decide what brand she wants, and then chooses the store with the lowest price on that item.

Shopping good

A company with one owner, personal liability, and pass-through taxation.

Sole proprietorship

Esperanza is starting a business by herself as an illustrator for magazines and children's books. She isn't concerned with personal liability, but she wants the business to be easy to set up.

Sole proprietorship

Adriana only buys doughnuts from her favorite local doughnut shop.

Specialty good

Shirina buys the equipment she needs for her bike repair service and signs a rental contract on a building.

Start

If a company is a pass-through entity, that means __________________. (Select the best answer.)

The company's income is not taxed as a separate entity. It is taxed only on the personal tax forms of its owners.

Adrian works for a company that buys jewelry at a low price and resells it to jewelry stores for a higher price.

Wholesale

Madison works for a company that buys paper from a paper manufacturer and then resells it to office supply stores.

Wholesale

Mai's company buys large quantities of grocery products and then repackages and sells them to grocery stores.

Wholesale

Pedro's company purchases jeans in bulk from the manufacturer and then resells them in smaller quantities to clothing stores.

Wholesale