Intro to Business - Ch 6 Review

What are the three main forms of business organization?

• corporations, proprietorships, and stockholders

• partnerships, corporations, and dividends

• sole proprietorships, partnerships, and corporations

• partner proprietorships, corporations, and sole partnerships

Which is true of a sole proprietorship?

• A sole proprietorship is often difficult and complicated to start up.

• Revenue for a sole proprietorship is usually higher than that for a corporation.

• Sole proprietors share decision making with others.

• Profits from a sole proprietorship are only taxed once.

What does unlimited liability mean to the owner of a business?

• The owner is responsible for all the company's debts.

• The owner has limited credit.

• The corporation is dissolved when the owner dies.

• The company will fail if the owner does not have all the skills needed to run the business.

Which type of business organization is a partnership most like?

• limited liability

• sole proprietorship

• corporation

• bank

Which is NOT an advantage of forming a corporation?

• The company continues even after one owner dies.

• There is limited liability for the founder.

• Raising capital for startup is easier.

• Profits are taxed twice: at the corporate level and at the shareholder level.

In order to become a corporation, what must a business have?

• over 500 employees

• double taxation

• a corporate charter

• stock certificates

Which business structure contains both the benefits of a small business and a corporation?

• cooperative

• car sharing

• nonprofit organization

• franchise

Which type of business makes a finished product, such as an automobile?

• industry

• manufacturer

• processor

• producer

How does a product get from a manufacturer to a wholesaler?

• by a producer

• by a processor

• by an intermediary

• by a retailer

Where do stores get the products that they sell?

• industries

• intermediaries

• wholesalers

• retailers