Chapter 8 Review

Question 1

One of the most important benefits of incorporating is...(243)

Accepted Answer

The owners enjoy limited liability

Question 2

A consumer cooperative is a retail business owned and operated by customers in order to...(246)

Accepted Answer

reduce costs

Question 3

An LLC can have foreign investors, but an S corporation cannot. (245)

Accepted Answer

True

Question 4

Which of the following is NOT considered a creative change?

Accepted Answer

Billy opens a home improvement store just like Home Depot

Question 5

A partnership faces many government regulations. (238)

Accepted Answer

False

Question 6

A sole proprietor is fully responsible for all the firm's losses. (235)

Accepted Answer

True

Question 7

An intrapreneur capitalist is an inventor who works for a corporation. (229)

Accepted Answer

True

Question 8

Entrepreneurs can tell if they are successful by examining their profits. (228)

Accepted Answer

True

Question 9

Which hybrid corporation is the easiest to establish? (245)

Accepted Answer

Limited Liabilty Partnership

Question 10

Who is a sole proprietor? (234)

Accepted Answer

a private academic tutor

Question 11

In most communities, _______ of the businesses will be organized as sole proprietorships. (234)

Accepted Answer

most

Question 12

A sole proprietor must share any profits with shareholders. (254)

Accepted Answer

False

Question 13

The goal of a not-for-profit organization is to earn money for its shareholders.

Accepted Answer

False

Question 14

If a stockholder dies... (243)

Accepted Answer

the corporation can continue to function with little change

Question 15

Bob founded a company and Monica works there. Todd is the CEO. Who is the entrepreneur?

Accepted Answer

Bob

Question 16

Wheat farmers get together to buy equipment for farming needs. Which category is this? (246)

Accepted Answer

producer cooperative

Question 17

Both sole proprietorships and partnerships... (235-8)

Accepted Answer

pay comparitively low taxes

Question 18

Under which category does the American Red Cross fall? (246)

Accepted Answer

not-for-profit organization

Question 19

From most to least common the order types of businesses is...

Accepted Answer

Sole proprietorships, corporations, partnerships

Question 20

Sole proprietorships always have higher tax rates than corporations. (235)

Accepted Answer

False

Question 21

Sole proprietorships are the most common type of business organization. (234)

Accepted Answer

True

Question 22

Sam makes financial contributions to Amy who runs a nail salon. What type of business is this?

Accepted Answer

limited partnership

Question 23

Owners of a corporation have the right to vote for the board of directors. (234)

Accepted Answer

True

Question 24

Farm cooperatives usually work to eliminate... (246)

Accepted Answer

wholesalers

Question 25

What is the first step in forming a corporation? (242-3)

Accepted Answer

Articles of incorporation are written

Chapter 8 Review

Questions 25

Chapter 8 Review

Questions 25