Chapter 6 Business Ownership and Operations

Question 1

A major disadvantage of owning a sole proprietorship is that the owner has limited liability.

Accepted Answer

False

Question 2

Cooperatives were formed to

Accepted Answer

save money on the purchase of certain goods and services

Question 3

About half (50%) of all businesses in the United State are sole proprietorships.

Accepted Answer

False

Question 4

The owner is responsible for the company's debt

Accepted Answer

unlimited liability

Question 5

A type of business that focuses on providing a service, not on making a profit

Accepted Answer

nonprofit organization

Question 6

Which industry does NOT produce raw goods?

Accepted Answer

procurement

Question 7

Unlimited liability means the owner

Accepted Answer

is responsible for the company's debts

Question 8

Which type of business most likely offers a service to its customers?

Accepted Answer

nonprofit

Question 9

A dividend is

Accepted Answer

the money made as a result of owning a share of stock

Question 10

Companies benefit when all functional areas

Accepted Answer

work together

Question 11

In which type of business do most Americans work?

Accepted Answer

Service

Question 12

An organization that is owned and operated by its members

Accepted Answer

cooperative

Question 13

Also known as distributors

Accepted Answer

wholesaler

Question 14

The most common type of business in the United States are

Accepted Answer

sole proprietorships

Question 15

One disadvantage that corporations face is

Accepted Answer

double taxation

Question 16

An advantage of a partnership is

Accepted Answer

all of the above

Question 17

An example of a franchise is

Accepted Answer

a McDonald's restaurant

Question 18

The buying and selling of goods that have already been produced

Accepted Answer

procurement

Question 19

In order to start a corporation, the first thing one must do is

Accepted Answer

obtain a corporate charter from the state government

Question 20

The business or art of money management

Accepted Answer

finance

Question 21

Which of the following is NOT a function involved in the operation of all types of businesses?

Accepted Answer

taxation

Question 22

Processed goods include all of the following except:

Accepted Answer

organic vegetables

Question 23

Partners share ____ legal and financial liability.

Accepted Answer

unlimited

Question 24

The three main types of business organizations are franchises, partnerships, and corporations.

Accepted Answer

False

Question 25

The process that involves getting consumers to buy a product or service

Accepted Answer

marketing

Question 26

The process of creating, expanding, manufacturing or improving goods and services

Accepted Answer

production

Question 27

The process of planning, pricing, promoting, selling, and distributing ideas, goods & services

Accepted Answer

marketing

Question 28

Income from a corporation is taxed twice.

Accepted Answer

True

Question 29

An advantage of a partnership is that banks are more willing to lend money to partnerships.

Accepted Answer

True

Question 30

Manufacturers turn raw or processed goods into ___.

Accepted Answer

finished goods

Question 31

A agreement to use the name and sell the products/services of a company in a designated area

Accepted Answer

Franchise

Question 32

Consumers usually deal directly with

Accepted Answer

retailers

Question 33

Which is NOT true of either a sole proprietorship or a partnership?

Accepted Answer

The government regulates them more than other businesses.

Question 34

There are three main types of business organizations: sole proprietorships, partnerships and

Accepted Answer

corporations

Question 35

Achieving goals by planning, organizing, directing, & controlling effective use of resources

Accepted Answer

management

Question 36

Retailers get their goods from

Accepted Answer

wholesalers

Question 37

Nonprofit organizations

Accepted Answer

focus on providing services rather than making a profit

Question 38

Which is NOT a function of all businesses?

Accepted Answer

retailing

Chapter 6 Business Ownership and Operations

Questions 38

Chapter 6 Business Ownership and Operations

Questions 38