AOF Acct. Exam Prep Unit 1

A business owned by one person

• Sole Proprietorship

• Partnership

• Corporation

A business owned by two or more people

• Sole Proprietorship

• LLC

• Partnership

A business that has one or more owners

• Corporation & LLC (limited liability company)

• LLC (limited liability company)& Partnership

• LLC (limited liability company) Sally Surf

A distinct thing such as a company, a firm, or a business.

• Entity

• Service Company

• Manufacturing company

A company that produces goods

• Merchandising

• Manufacturing

• Service

A company that sells a service rather than a tangible product to its customers.

• Service

• Corporation

• Merchandising

A company that sells ready-made products purchased from a manufacturer to its customers.

• Merchandising

• Manufacturing

• Service

Read the information below organize these options into the right categories

After graduating from college with a master’s degree in chemistry, Polly wasn’t sure where to begin her career. For the last two years, she worked as an intern for a worldwide perfume company that wanted to hire her full time. She liked working there and had made many good contacts, but she wanted to try working for herself. So, Polly decided to try producing perfume on her own in a home lab that she’d been experimenting in when she had free time. The perfume she liked to make was all organically based from a variety of flowers, herbs, and spices. Due to the nature of the perfume industry, she believed she needed the utmost legal protection, so she formed the appropriate business entity.

Groups:

(a) Business Form

,

(b) Business Type

• Manufacturing

• LLC

• Service

• Merchandising

Molly lives in a tourist town in which her mom has a business that rents bicycles. She makes a respectable income during most of the year because they live in sunny Southern California. Since Molly’s mom worked for others in business prior to owning the bike rental shop, she has a good deal of the experience she needs to succeed in running her own company. Recently, when one of the customers crashed on one of the rented bikes, he sued Molly’s mom, claiming that the brake system failed. Luckily, the insurance will cover much of the costs, but another accident like this one could put Molly’s mom out of business. What type is business and type is this?

• Sole Proprietorship & Service

• Partnership & Manufacturing

• Corporation & Manufacturing

The IRS is the agency that collects taxes and is one of the most powerful departments in the US government. The IRS has powers of enforcement to collect taxes, levy fines, and confiscate property.

• True

• False