Chapter 3.2 Quiz

The legal obligation of a business owner to use personal money and possessions to pay the debts of the business is known as ________________________

• dividend

• franchise

• corporation

• liability

Which of the following terms means the owner of the business can be legally forced to use personal money to pay debts of the business?

• limited liability

• legal liability

• unlimited liability

• liability

Which of the following terms means that the owner of the business cannot be forced to use personal money and possessions to pay business debts?

• unlimited liability

• legal liability

• limited liability

• liability

True or False--The level of liability for a business owner depends on the type of ownership structure of the business.

• True

• False

Which of the following forms of business organization is defined as a business in which a single individual owns the business?

• sole proprietorship

• partnership

• corporation

• S Corporation

Which of the following forms of business organization comprise the majority of businesses in the United States?

• sole proprietorship

• partnership

• corporation

Which of the following is an advantage of organizing a business as a sole proprietorship?

• Difficult to raise capital

• Ease of formation

• Unlimited liability

Any business other than the owners name is called a trade name, or a D.B.A. What does D.B.A. mean?

• Doing Business Accordingly

• Doing Business Amazingly

• Doing Business Alway

• Doing Business As

If a sole proprietor hires employees, he/she must obtain a/an

• Social Security Number

• Employer Identification Number

• Employee Identification Number

A legally defined type of business organization in which at least two individuals share the management profit, and liability is a/an

• sole proprietorship

• partnership

• corporation