OYF - Chapter 3 Test -Types of Business & Business Ownership

Which type of business ownership provides limited liability for the owner(s)?

• corporation

• sole proprietorship

• general partnership

• all of the above

One advantage of a general partnership over a

sole proprietorship is a general partnership

• provides limited liability

• is a corporation

• provides unlimited liability

• can rely on more than one person for financial

  backing

Which of the following phrases best describes a

wholesaling business?

• a business that converts materials into

  products for sale

• a business that sells products to final buyers

• a business that performs services

• a business that sells products to retailers

Most businesses in the United States are

• corporations

• partnerships

• sole proprietorships

• cooperatives

Over the past fifty years the American economy

has changed in what way?

• manufacturing has replaced retailing as the

  most dominant industry

• service businesses have become far less

  important to the economy

• wholesaling has become the dominant

  industry in the economy

• service and trade businesses have become

  the dominant industries

Which of the following statements about corporations

is true?

• corporations are easier to set up than sole

  proprietorships

• a limited partnership is a type of corporation

• corporations sell stock to raise money

• a cooperative is a type of corporation

The businesses predicted to undergo the most

growth in the coming decade are

• primarily service businesses

• primarily manufacturing businesses

• businesses that convert materials into

  products

• businesses that sell retail products to

  wholesalers

A business owner with unlimited liability

• could have to sacrifice personal money and

  possessions to pay business debt

• is not personally responsible for the debts

  of the business

• is a shareholder of a corporation

• would not have to sacrifice personal money

  and possessions to pay business debt

The purpose of a cooperative is

• to earn profits for management

• to benefit its members

• to provide unlimited liability to its

  members

• to pay dividends to investors

One advantage of a corporation as compared to a

sole proprietorship is

• a corporation is easier to set up and

  requires less paperwork

• a corporation provides limited liability for

  its owners

• a corporation has fewer shareholders

• a corporation has a partnership agreement