Unit 5 Test Review

Front

Which of the following is the definition for sole proprietorship?

Back

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

Front

Which of the following is the definition for Corporation?

Back

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

Front

Which of the following is the definition for Franchise?

Back

business investment that involves renting or leasing another successful business model

Front

Which of the following is the definition for Partnership?

Back

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

Front

Which of the following is an advantage of a sole proprietorship: easy to start up, Decisions do not require the approval of a co-owner, boss, or other "higher-up", the owner can keep the profits of successful management without having to share them with other owners.

Back

All the other options

Front

Which of the following is an advantage of a partnership? Options: they are hard to start, management is hard between two or more people, partnerships can usually attract financial capital more easily than proprietorships., They are inefficient.

Back

partnerships can usually attract financial capital more easily than proprietorships.

Front

Which of the following is a disadvantage of a partnership? Options: If one partner causes the firm to suffer a huge loss, each partner is fully and personally responsible for the loss., When a partner dies or leaves, the partnership must be dissolved and reorganized as a new partnership if the remaining partners want to stay in business., the potential for conflict between partners.

Back

all the options are disadvantages

Front

Which of the following is a disadvantage of a corporation? Options: it is easy to raise financial capital using stocks, bonds, or loans., the double taxation of corporate profits. Profits are taxed the first time when the corporation pays income taxes. The profits are taxed a second time when shareholders pay taxes on their dividends., it is easy to get a charter to start a corporation., Owners and shareholders have total control over what happens with the business.

Back

the double taxation of corporate profits. Profits are taxed the first time when the corporation pays income taxes. The profits are taxed a second time when shareholders pay taxes on their dividends.

Front

Which of the following is an advantage of a corporation? Options: the corporation provides limited liability for its owners. This means that the corporation itself, not its owners, is fully responsible for its obligations., the corporation's board of directors can hire professional managers to run the firm. This means that the corporation's owners, its stockholders, can own a portion of the corporation without having to know much about the business itself., unlimited life, meaning that the corporation continues to exist even when shareholders sell their ownership shares of stock to someone else. Because the corporation is recognized as a separate legal entity, the name of the company stays the same, and the corporation continues to do business.

Back

All other answers are advantages.

Front

Which of the following is an advantage of a Franchise? Options: a nationwide network that had a respected product, a deep product line, excellent quality standards, nationwide advertising, and professional advice whenever needed., the ease of raising financial capital through stocks, bonds, and loans., the ease of management between two or more partners., the limited liability protection of a person's assets if the company fails.

Back

a nationwide network that had a respected product, a deep product line, excellent quality standards, nationwide advertising, and professional advice whenever needed.