Business Organizations

Front

What is a business organization (firm)?

Back

An establishment formed to bring goods and services to the market

Answer explanation

A business organization (firm) is an establishment formed to bring goods and services to the market, making it the correct choice.

Front

Liability

Back

A legal obligation to pay debts/injury settlements incurred by the business

Answer explanation

Liability refers to the legal obligation of a business to pay debts or injury settlements, making it the correct choice in this context.

Front

Do liability levels vary?

Back

Yes, liability levels vary based on the type of business organization

Answer explanation

Liability levels vary based on the type of business organization, not all organizations have the same level of liability.

Front

In a sole proprietorship, who is held liable if someone gets hurt at the business?

Back

The owner of the business

Answer explanation

In a sole proprietorship, the owner of the business is held liable if someone gets hurt at the business. The owner has personal responsibility for any liabilities or damages.

Front

Sole proprietorship

Back

A business owned and run by one person.

Answer explanation

A sole proprietorship is a business owned and run by one person, making it the correct choice among the options provided.

Front

What might be some of the advantages of operating as a sole proprietorship?

Back

Easy to start up

Answer explanation

Operating as a sole proprietorship is advantageous because it is easy to start up, requiring minimal paperwork and legal formalities.

Front

Which of the following is NOT an advantage of operating as a sole proprietorship?

• Easy to manage
• Sole receiver of profit
• Satisfaction of owning your own business
• High operational costs

Back

High operational costs

Answer explanation

The correct choice is 'High operational costs' because it is a disadvantage of operating as a sole proprietorship, not an advantage.

Front

What is a partnership in the context of business organizations?

Back

A business organization that is owned by two or more people who agree to split responsibilities and profits

Answer explanation

A partnership in the context of business organizations refers to a business organization owned by two or more people who agree to split responsibilities and profits.

Front

What happens if someone gets hurt at a major corporation? Who is held responsible for the injuries?

Back

The company is held responsible and will most likely face a lawsuit.

Answer explanation

The company is held responsible for injuries at a major corporation and will most likely face a lawsuit.

Front

What is a corporation?

Back

A separate legal entity owned by shareholders with limited liability

Answer explanation

A corporation is a separate legal entity owned by shareholders with limited liability, meaning the shareholders are not personally responsible for the company's debts or liabilities beyond their investment.