Chapter 6 (ALL TESTS) - Business
List than five main functions involved in the operation of all types of businesses.
- production and procurement - Marketing - Management - Finance and accounting
An organization that is owned and operated by its members is a _________
Cooperative
One disadvantage that corporations face is - ?
Double taxation
A major disadvantage of owning a sole proprietorship is that the owner has limited liability.
False
About half of our businesses in the United States, are still proprietorships.
False
Nonprofit organizations - ?
Focus on providing services rather than making a profit.
What is a major advantage of a corporation? Why is this an advantage?
One major advantage of a corporation is the limited liability. There are so many people in a corporation that the blame doesnt only lie on one person
Process goods include don't include - ?
Organic vegetables
The owner is responsible for the companies debts.
Unlimited liability
A firm that buys large quantities of product from many farms and then divides fruits and vegetables into smaller quantities and sells them to grocery stores is a __________
Wholesaler/ distributor
Retailers get their food from?
Wholesalers
Maintaining and checking records, handling bills, and preparing financial reports for a business is called
accounting
Which department in a company pays the bills for business?
accounting
How does a product get from a manufacturer to a wholesaler?
by an intermediary
An organization that is owned and operated by its members.
cooperative
In order to become a corporation, what must a business have?
corporate charter
The process of achieving company goals by planning, organizing, directing, controlling, and evaluating the effective use of resources is called?
management
A business that turns raw materials into finished goods is called a _______
manufacturer
Processed goods are turned into finished products by a _____________
manufacturer
The process of planning, pricing, promoting, selling, and distributing ideas, goods, and services is known as?
marketing
The process that involves getting consumers to buy a product or service.
marketing
Which department in a company sets the price of a product?
marketing
A processor changes raw materials into a ______ product
more finished
A type of business that focuses on providing service, not on making a profit.
nonprofit organization
Unlimited liability means?
the owner is responsible for all companys' debts.
Also known as distributors.
wholesaler
Where do stores get the products that they sell?
wholesalers
Companies benefit when all functional areas?
work together
In order to start a corporation, the first thing one must do is?
Obtain a corporate charter from the state government.
The business or art of money management.
finance
A contractual agreement to use the name and sell products or services of a company in a designated geographic area.
franchise
Which business structure contains both the benefits of a small business and a corporation?
franchise
A business that moves goods from one business to another is called a(n)
intermediary
In advantage of a partnership is - ?
(All of the above) - that the partners make decisions together. - Professor banks are often more willing to lend money to a partnership than a sole proprietorship. - That the partners often bring different skills and talents to the business.
List three industries that produce raw goods?
- Farming - timber - fishing - food - oil
Sole proprietorships account for about ____ of all businesses in the US
70%
Which best describes management most important job?
Achieving goals by planning, controlling, and evaluating the effective use of resources.
What is the advantage/disadvantages of owning a franchise?
Advantages of Owning a Franchise: -Brand Recognition: Benefit from an established and recognized brand, potentially attracting more customers from the start. -Proven Business Model: Franchises often come with a proven business model, reducing the risk of failure compared to starting a business from scratch. Disadvantages of Owning a Franchise: -Franchise Fees and Royalties: Franchise owners typically pay initial fees and ongoing royalties to the franchisor, impacting profitability. -Limited Independence: Franchisees operate within the framework set by the franchisor, limiting their ability to make independent business decisions.
What are some of the advantages and disadvantages of a partnership.
Advantages:decisions made in groups instead of individual, easy to start and only taxed once. Disadvantages: unlimited legal and financial libaility is shared
During the life of a business, the way the business is organized
Can be changed
A business that moves goods from one business to another is?
Intermediary
The process of achieving company goals by planning, organizing, directing, controlling, and evaluting the effective use of resources is called ________
Management
Which type of business makes a finish product, such as an automobile?
Manufacturer
A firm that turns corn into vegetable oil is called an ________
Processor
What is NOT an advantage of a corporation?
Profits are taxed twice; at the corporate level and at the shareholder level
What is true of sole proprietorship?
Profits from a sole proprietorship are taxed once.
Discuss and give examples how that counting and finance functions can affect a businesses, marketing and production process.
The cost gets passed down from each layer (of businesses) eventually to the consumer. - if the financiers and accountants both work in the money department of a business, if new plans were made this could make new plans of production and/or the cost could go up
What dose unlimited liability mean to the owner of the business?
The owner is responsible for all the company's debts.
Why is it easier for partnerships to obtain capital than it is for proprietorships?
The partnerships contribute more money and are more likely to receive loans from banks because it is more reliable than relying on one singular person.
Which is true of intermediaries, wholesalers, and retailers?
They buy and sell goods.
How do each of these relate to one another? Why would one function be at odds with another function of the same business? Provide an example
They collectively contribute to the overall success and functionality of a business. However, conflicts can arise due to varying priorities or resource allocation. For example, production and marketing may sometimes be at odds. The production function aims for efficiency and cost-effectiveness, often favoring standardized processes. On the other hand, the marketing function may demand product customization or frequent updates to meet changing consumer preferences. This misalignment can create tension, as increased production flexibility might conflict with the desire for streamlined and cost-effective manufacturing. Striking a balance between these functions is crucial for a business to meet customer demands efficiently while managing costs effectively.
In advantage of owning a partnership is that beings are more often more willing to lend money to partnerships than sole proprietorships.
True
Income from a corporation is taxed twice.
True
The buying and reselling of goods that have already been produced is called _______
procurement
The buying and reselling of goods that have already been produced.
procurement
A company that gathers materials in their original state from natural resources is called a ____________
producer
The process of creating, expanding, manufacturing, or improving goods and services.
production
Consumers usually deal directly with - ?
retailers
Cooperatives were formed to
save money on the purchase of certain goods and services.
Cooperatives were formed to - ?
save money on the purchase of certain goods and services.
In which type of business do most Americans work?
service
Which type of business organization is a partnership most like?
sole proprietorship
What are three main forms of business organizations?
sole proprietorship, partnership, corporation
Most US businesses are - ?
sole proprietorships
The most common type of business in the United States are?
sole proprietorships
