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Basics of Business Unit 1
Unlimited liability means
Consumers usually deal directly with
Basics of Business Unit 1
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Basics of Business Unit 1 Review
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52
Answers
1
Consumers usually deal directly with
distributors.
retailers.
manufacturers.
wholesalers.
2
Unlimited liability means
the owner must have insurance.
owner is responsible for only things on the property.
the owner is responsible for the company’s debts.
the owner shares the liability with the stockholders.
3
The owner of a sole proprietorship is not personally responsible for the debts of the business.
TRUE
FALSE
4
SBA is an acronym that stands for the
Small Business Administration.
Small Businesses of America.
Start-Up Business Administration.
Small Businesses Agency.
5
If the company should experience a financial loss, stockholder would have unlimited liability.
TRUE
FALSE
6
One disadvantage that corporations face is
environmental laws.
competition
the cost of raw materials.
double taxation
7
Granted by the federal government, this is the sole right to own an invention.
trade name
trademark
patent
copyright
8
The owner is responsible for the company’s debts
nonprofit organization
cooperative
franchise
unlimited liability
9
John opens a McDonalds in West Fargo. This is an example of
sole proprietorship.
franchise.
corporation.
partnership.
10
Sole proprietor pays taxes on income from the business as part of his/her personal income tax.
True
False
11
A type of business that focuses on providing a service, not on making a profit
cooperative
intermediary
nonprofit organization
franchise
12
Top source of capital for a sole proprietorship is friends and family.
FALSE
TRUE
13
Manufacturers turn raw or processed goods into
.
raw goods
none of the above
finished goods
processed goods
14
Investors won’t usually invest in a sole proprietorship.
FALSE
TRUE
15
3 main types of business organizations: sole proprietorships, partnerships, and ?
cooperatives
franchise
corporation
nonprofit
16
Sue and Sally own a business together. This is an example of a sole proprietorship.
TRUE
FALSE
17
The sole proprietor must gain permission from the board of directors to sell the business.
False
True
18
About half of all businesses in the United States are sole proprietorships.
False
True
19
In order to start a corporation, the first thing one must do is
obtain a corporate charter from the state government.
hire an accountant and an attorney.
hire employees.
start bank accounts
20
Also known as distributors
intermediary
franchise
wholesaler
nonprofit organization
21
About four out of five businesses fail in their first how many year(s)?
1
2
4
5
22
The 3 main types of business organizations: sole proprietorships, partnerships, & corporations.
False
True
23
Most U.S. businesses are
successful.
sole proprietorships.
virtual businesses.
corporations.
24
The owner of a corporation has full power of management and control of the business.
FALSE
TRUE
25
What form of business has the least amount of taxation and government regulation?
franchise.
corporation.
sole proprietorship.
partnership
26
Retailers get their goods from
partnerships.
consumers.
wholesalers.
dealers.
27
The corporation is responsible for paying corporate taxes on any profit the company makes.
TRUE
FALSE
28
A primary disadvantage of a corporation is the cost of running the corporate form of business.
FALSE
TRUE
29
All responsibilities and business decisions fall on the shoulders of the sole proprietor.
FALSE
TRUE
30
An example of a franchise is
a Wal-Mart superstore.
a “mom and pop” grocery store.
a Sears department store.
a McDonald’s restaurant.
31
A small business serves a limited geographic area and employs no more than 100 people.
FALSE
TRUE
32
The business ownership that has a continuous existence seperate of its members is called a
corporation.
partnership.
sole proprietorship.
franchise.
33
Right/license granted by a company to an individual/group to sell products in a specific area
franchise.
sole proprietorship.
partnership
corporation
34
The most common type of business in the United States are
corporations.
partnerships.
sole proprietorships.
“mom and pop” stores.
35
A major disadvantage of owning a sole proprietorship is that the owner has limited liability.
TRUE
FALSE
36
One of the biggest obstacles in starting a business is
accepting responsibility.
having a good idea.
being good at something.
obtaining financing.
37
A business that moves goods from one business to another
franchise
nonprofit organization
intermediary
wholesaler
38
This gives rights to artists to own their creations.
trade name
copyright
trademark
patent
39
An organization that is owned and operated by its members
cooperative
nonprofit organization
wholesaler
franchise
40
A contractual agreement to use the name & sell the products/services of a company in an area
nonprofit organization
cooperative
wholesaler
franchise
41
An advantage of a partnership is
banks are more willing to lend money to a partnership.
all of the above.
that partners often bring different skills & talents.
that the partners make decisions together.
42
Nonprofit organizations
do not register with the government.
must still pay taxes.
focus on providing services rather than making a profit.
out number sole proprietorships in the United States.
43
Entrepreneurship is the process of
gathering the resources needed to go into business.
all of the above.
using research to see if there is a market for a product.
recognizing a business opportunity.
44
Banks are more willing to lend money to partnerships than sole proprietorships.
FALSE
TRUE
45
An advantage of a corporation is
on-going life.
limited liability.
ease of raising capital.
all of the above.
46
A corporation provides you the advantage of limited liability.
TRUE
FALSE
47
A person who purchasing a franchise decides how the business will be advertised and managed.
TRUE
FALSE
48
Processed goods include all of the following
except
gasoline.
steel.
organic vegetables.
white sugar.
49
A business that is owned and run by two or more people.
partnership
nonprofit
sole proprietorship
corporation
50
A group of persons elected by the stockholders to manage a corporation is called a
board of directors.
tribunal.
CPAs.
corporate panel.
51
Frito-Lay’s
Doritos
®
, Kellogg’s
Rice Krispies Treats
®
, and
Visa
®
are examples of what?
copyright
trade name
trademark
patent
52
The most common kind of business is a corporation and it is the easiest to establish.
TRUE
FALSE
