busi ch 8

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 one of the following statements best describes what a dividend is?

A dividend is a percentage of the profits that is distributed to each owner of a corporation.

How does a partnership get the financial resources it needs to fund the start-up expenses and to expand the business when needed

The partners pool their financial resources.

In these types of business organizations, businesspeople are able to avoid the key disadvantage of unlimited liability.

c and s corporations

________ must keep detailed financial records and file reports on their business operations and finances with local, state and federal governments

corporations

Approximately 70% of corporations in the U.S. are classified as C corporations.

false (70% are S corporations)`

A franchise is an arrangement in which the ________—the owner of a trademark, a trade name, business process, or a copyright—licenses the ________ to use the trademark, trade name or copyright in the selling of goods and services in a given territory for a monetary payment.

franchisor; franchisee

When two large companies in the same industry combine, the transaction often requires the approval of the U.S. Justice Department because of concerns about

how it will impact competition within the industry.

Before starting a ________, owners agree to a contract that details each owner's responsibilities, financial investment, and right to a share of the profit.

partnership

Which one of the following statements best describes what a royalty is?

percentage of gross or net profit or a fixed amount per sale

In a ________, one person is responsible for all aspects of a business ranging from accounting and marketing to human resources and production techniques.

sole proprietorship

The ________ is the simplest form of business.

sole proprietorship

face unlimited liability

sole proprietorship- partnerships

A negative halo affect occurs when

the demand at a franchisee's business is negatively impacted by the performance of another franchisee.

In a sole proprietorship, the owner alone bears the burden of any losses or liabilities incurred by the business.

true

A merger occurs when

two companies enter into an agreement to operate as a new company.