Unit 3 Formative 1 Review

What is a balance sheet?

• Shows profit or loss and revenues and expenses

• Shows assets, liability, and equity as of a current date

• Inflow and outflow of cash over a specific period of time

• A report showing a business's sales, expenses, and profits for a certain period

True or False: Crowdfunding is a method that entrepreneurs use to secure financing.

• True

• False

A ________________ is a combination of two or more business enterprises to form a single firm

• Merger

• Conglomerate

• Incubator

• Venture Capitalist

Conglomerates are firms with ​ (a)   or more businesses making ​ (b)   products, with no single business responsible for a majority of its sales.

• four
• unrelated
• two
• related

A feature of taxation that allows stockholder dividends to be taxed both as corporate profit and personal income

• Common Stock

• Double Taxation

• Principal

• Franchise

Which type of merger involves firms that produce the same kind of product?

• Vertical Merger

• Horizontal Merger

• Both A and B

• Neither A or B

True or False: A venture capitalist provides investment funds for established businesses in exchange for ownership shares.

• True

• False

Which of the following is not a reason for merging companies?

• Faster Growth

• To slow down growth

• Elimination of Rivals

• Diversification

One disadvantage of a  ___________ is that the “owner” has to pay a fee and royalties to run the business.

• Corporation

• Franchise

• Partnership

• Sole Proprietorship

True or False: In a general partnership, each partner is fully responsible for the acts of all other partners.

• True

• False