POA TEST Gr 10 - Intro to Accounting (FOB, tech, concepts)

A business run by 2-20 people and has unlimited liability is known as a:

• Company

• Sole trader

• Partnership

The two forms of business ownership with unlimited liability are:

• Sole trader

• Public company

• Partnership

• Private company

Advantages of a sole trader are:

• Limited liability

• The owner makes all the decisions

• The owner takes all the profit

• Can raise substantial capital

Advantages of a partnership are:

• The partners split the profit

• Unlimited liability

• Raise more capital than a sole trader

• Share the workload

This type of business is subject to many more laws and are more difficult to form.

• Proprietorship
• Partnership
• Corporation
• Franchise

Which of the following best describes the term limited liability? If the business fails:

• Personal possessions of the owner can be taken to pay any debts

• The owner is personally liable for all the debts of the business

• There is no limit on the amount the owner has to pay to settle debts

• The owner only loses the amount invested in the business

Which of the following is a drawback for an entrepreneur setting up a business as a sole proprietorship?

• Profit is shared

• Financial accounts are kept private

• Limited liability

• Unlimited liability

Which legal structure would an individual wishing to start-up a small business choose because it is quick, easy and inexpensive to set up?

• Sole proprietorship

• Partnership

• Privately Held Corporation

• Corporation

Two Brothers Pizza would most likely show which type of ownership

• Partnership

• Corporation

• Stock and Bonds

• Single Ownership

The most important protection given by law to shareholders of a limited company is:

• Limited liability

• Rights to receive subsidies

• Enhanced employment rights

• Immunity from being sued