Business Quiz Questions

Which of the following is a disadvantage of a sole proprietorship?

• Limited control for the owner

• Limited liability for the owner

• Difficulty in raising capital

• Seperation of ownership and control

Answer explanation

A sole proprietorship has a disadvantage of difficulty in raising capital.

When two or more individuals operate a business and share profits and liabilites, what ownership category does it fall into?

• Sole Propietorship

• Corporation

• Limited Liability Company (LLC)

• Partnership

Answer explanation

When two or more individuals operate a business and share profits and liabilities, it falls under the ownership category of Partnership.

What is a shareholder in a corporation?

• A partner

• The owner and operator

• An individual who owns stock

• A government official overseeing operation

Answer explanation

A shareholder in a corporation is an individual who owns stock. They have ownership rights and can participate in decision-making processes.

What is a potential advantage of sole proprietorship?

• Limited liability for the owner

• Ease of decision-making

• Access to a large pool of capital

• Business will survive even if the owner leaves

Answer explanation

Sole proprietorship offers ease of decision-making, allowing the owner to make quick and efficient choices without the need for consultation or approval from others.

In a partnership, how are profits and liabilities typically shared among the partners?

• Equally

• Based on the amount of capital invested

• According to the number of years each partner has been in the business

• Randomly

Answer explanation

Profits and liabilities in a partnership are typically shared based on the amount of capital invested. This ensures a fair distribution of returns and responsibilities among the partners.

What is a characteristic of a corporation?

• Limited liability for the owners

• Unlimited liability for the owners

• Absence of legal formalities

• Operated by a single person

Answer explanation

A characteristic of a corporation is limited liability for the owners, which means their personal assets are protected from business debts and obligations.

Which business ownership type is known for having a separate legal entity from its owners?

• Sole proprietorship

• Partnership

• Corporation

• Contractor

Answer explanation

A corporation is known for having a separate legal entity from its owners.

Which of the following is a disadvantage of a partnership?

• Limited liability for the partners

• Ease of transfer of ownership

• Potential for conflicts among partners

• Tax advantages for the partners

Answer explanation

A disadvantage of a partnership is the potential for conflicts among partners.

In which ownership category do the owners elect a board of directors to make major decisions on behalf the business?

• Partnership

• Sole Proprietorship

• Corporation

• Contractor

Answer explanation

In a corporation, owners elect a board of directors to make major decisions on behalf of the business.

The term "Target Market" refers to what in marketing?

• The number of customers that a business wants to acquire

• A group of potential customers that have similar characteristics and needs

• The geographical location of where a business is located

• The total amount of money predicted to be made from a specific audience

Answer explanation

The term 'Target Market' refers to a group of potential customers with similar characteristics and needs.