IBT Chapter 6 - Business Ownership and Operations

Unlimited liability means

• the owner is responsible for only accidents that occur on business property.
• the owner is responsible for the company’s debts.
• the owner must have insurance.
• the owner shares the liability with the company’s stockholders.

An advantage of a partnership is

• that the partners make decisions together
  
• that the banks often more willing to lend money to a partnership than to a sole proprietship
• that the partners often bring different skills and talents to the business
• all of the above

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

One disadvantage that corporations face is

• competition
• environmental laws
• the cost of raw materials
• double taxation

Nonprofit organizations

• focus on providing services rather than making a profit
• outnumber sole proprietorships in the United States
• must still pay taxes
• do not register with the government

An example of a franchise is

• a McDonald's restaurant
• a "mom and pop" grocery store
• a Sears department store
• a Wal-Mart superstore

Processed goods include all the following except

• organic vegetables
• white sugar
• steel
• gasoline

Retailers get their goods from

• consumers
• dealers
• wholesales
• partnership

The process of planning, pricing, promoting, selling, and distributing ideas, goods, and services is known as

• financing
• procurement
• accounting
• marketing

Companies benefit when all functional areas

• operate independently
• monitor each other
• work together
• belong to a union