ENT Final

____ pay taxes on profits and their shareholders pay taxes on dividends they receive, resulting in double taxation.

C-corporations

To operate as a sole proprietor requires nothing more than a ____.

Certificate of Doing Business Under an Assumed Name"

____ is created when the business is adequately capitalized and has highly regarded investors, an experienced management team, customers, a unique technology, product, or service, the ability to continually innovate, and a rapidly expanding market.

Value

In a/an ____, all partners assume unlimited personal liability and responsibility for the management of the business.

general partnership

When one or more people agree to assume unlimited personal liability and responsibility for management of the business, a ____ exists.

general partnership

The section of the business plan that presents the strategy that will be used to ensure that the business is sustainable and continues to scale over its life is included in the ____.

growth plan

A ____ is simply evidence that a technology, product, business model, or idea is feasible.

proof of concept

The micro strategy process repeats itself over and over again and with each successful outcome, the new business is moved toward a complete ____.

proof of concept

____ are primarily interested in the company's margins and cash flow projections.

Bankers/Lenders

By creating a corporation and issuing stock, the entrepreneur is giving up a measure of control to the ____.

Board of Directors

A financial vehicle that enjoys limited liability in that its owners are liable for its debts and obligations only to the limit of their investment is a ____.

C-corporation

A financially healthy company will see its major source of ____ coming from operating sources, such as sales.

cash inflows

A feasibility study and a business plan are essentially the same.

False

A high-growth venture cannot be started as a sole proprietorship.

False

A highly focused executive summary and pitch presentation are best developed from a completed business plan.

False

Investors tend to look for technology-driven companies rather than market-driven companies.

False

LLCs are becoming a popular vehicle for companies that may have global investors, because the C-corporation does not permit foreign ownership.

False

Nonprofit corporations are not allowed to make a profit, according to the Internal Revenue Service.

False

The executive summary of the business plan should be no more than two pages long.

False

The law requires a partnership to draw up a written partnership agreement based on the Uniform Partnership Act.

False

The strongest product POC is a working prototype.

False

Which of the following is not a flaw that investors commonly find in business plans?

Lack of enthusiasm

Which of the following is not a principle concern of investors?

Market analysis

The ____ gives information about the projected profit or loss status of the business for a specified period of time.

None of these cohices

____ make(s) all partners responsible for the obligations that each incurs in the course of doing business.

Ostensible authority

Professionals such as lawyers, doctors, and accountants frequently employ the legal structure of a ____.

Partnership

Which of the following statements is not true of an S-corporation?

Partnerships may be shareholders

Which section of the business plan details features and benefits as well as the plan for prototyping and testing?

Product/Service plan

Which ratio uses net income and net sales from the income statement to give the percentage of each dollar of sales remaining after all costs of normal operations are accounted for?

Profit Margin

More than 76 percent of all businesses in the United States are ____.

Sole proprietorships

Which of the following is not a concern for lenders when they consider an entrepreneur for a loan?

The number of strategic partners the venture has

Building a POC prototype reduces the risk of failure and clarifies customer needs.

True

Common stockholders are entitled to vote at stockholder meetings.

True

DBA stands for a certificate of doing business under an assumed name.

True

Having a strategic plan in place for the venture enables the entrepreneur to choose a legal form that won't have to be changed or one that can easily be shifted to when the time is right.

True

In a sole proprietorship, the owner is the only person responsible for the activities of the business and, therefore, is the only one to enjoy the profits and suffer the losses.

True

In terms of its treatment of income, expenses, and taxes, a partnership is essentially a sole proprietorship consisting of more than one person.

True

POC tests involve field work with the customer.

True

Sole proprietorships, partnerships, S-corporations, and limited liability companies all permit pass-through earnings and losses, but S-corporations and LLCs offer more protection from liability.

True

Somewhere in the micro strategy process, the business is actually launched in a small, controlled way.

True

Submitting a professionally crafted business plan is less important than making it clear what the entrepreneur has accomplished in the way of starting the business.

True

The ____ is different from the other financial statements in that it looks at the financial health of the business at a single point in time.

balance sheet

A ____ will tell the entrepreneur whether people are interested in the product/service and prove that it's worth the time and money to build out a more elaborate site.

beta site

Entrepreneurs typically face two types of POC: the technology or product POC, and the ____ POC.

business model

A ____ depends on a feasible business model that has been market-tested and is reliable.

business plan

Upon the death of a partner, the insurance proceeds can be used to keep the business going or to buy out the deceased partner's interest under a/an ____.

buy/sell agreement

In a/an ____, corporate stock is owned privately by a few individuals and is not traded publicly on a securities exchange.

closely help corporation

The ____ plan reflects recognition that sometimes the "best laid plans" do not work the way you intended.

contingency

The U.S. Supreme Court has defined the ____ as an artificial being, invisible, intangible, and existing only in contemplation of the law.

corporation

The higher the ____, the more liquid the company is and the more easily these assets can be converted to cash to pay off short-term obligations.

current ratio

Anyone investing in a new venture has four principal concerns: rate of growth, return on investment, ____ and ____.

degree of risk/protection

Sole proprietorships offer several advantages, which include all of the following except ____.

dividends are paid to owners

A corporation that is chartered in the state in which it will do business and issue stock is a/an ____.

domestic corporation

Entrepreneurs should keep in mind that the purpose for doing a/an ____ is to sell the business.

executive summary

Today most investors want to see a well-written ____ that tells a compelling story and grabs their interest.

executive summary

A good way to test a new concept in the marketplace is through a ____.

feasibility study

A ____ corporation is chartered in a state other than in the one in which it will do business.

foreign

So that entrepreneurs do not have to incur the tremendous cost of purchasing equipment for a manufacturing plant, they may ____.

form a strategic alliance

Income derived from for-profit activities in a nonprofit corporation is subject to ____.

income taxation

___ life insurance is a policy on the life of principal members of the partnership, usually the senior partners.

key-person

A corporate form that enjoys the pass-through tax benefits of partnerships in addition to the limited liability of a C-corporation is known as a ____.

limited liability company

State law permits certain professionals, such as health care professionals, engineers, accountants, and lawyers, to form corporations called ____.

professional services corporations

The new environment for business planning makes the case for the importance of a feasibility study and ____ to prove the concept and enable the founding team to launch the venture before completing the formal business plan.

micro strategies

The ____ for POC consists of three primary elements: outcomes, assets, and actions.

micro strategy

A corporation established for charitable, public (scientific, literary, or educational), or religious purposes or for mutual benefit (trade associations, tennis clubs), as recognized by federal and state laws, is a ____.

non-profit corporation

In forming a ____, the entrepreneur gives up proprietary interest in the organization and dedicates all the assets and resources of the corporation to tax-exempt activities.

nonprofit corporation

Only about 25 percent of all U.S. businesses are ____, but they account for 67 percent of all sales transactions.

nonprofits

All of the following are types of nonprofit organizations except ____.

novelty ships

The ____ plan focuses on issues related to processes the venture will own and outsource, as well as where it will get its raw materials, and what type and quantity of labor will be required.

operations

The ____ plan specifies the legal form of organization that the venture will take, whether that be sole proprietorship, partnership, LLC, or corporation.

organization

An executive summary should demonstrate a clear link between the ____ and the ____.

pain/solution

When two or more people share the assets, liabilities, and profits of the business, the legal structure is a ____.

partnership

To avoid ____, the team needs to change its angle of vision by looking at the situation in a new way and then testing alternative hypotheses.

pattern recognition bias

Once the new venture has passed the startup stage, additional value is created by ____.

significant customers

____ partners typically provide capital but do not actively participate in the management of the business.

silent

The owner is the only person responsible for the activities of the business in a ____.

sole proprietorship

Often small businesses such as pizza parlors and boutiques are run as ____.

sole proprietorships

Each partner owns and has use of the property acquired by the partnership, unless otherwise stated in ____.

the partnership agreement

If a nonprofit corporation is ever dissolved, its assets must be distributed ____.

to another tax exempt organization

As long as the market is growing, it is more important that the entrepreneur is solving a critical pain with a value proposition the customer quickly understands.

true