Forms of Business Organization Quiz

What are the three main forms of business organization mentioned in the text?

• Sole proprietorship, partnership, corporation

• Sole proprietorship, partnership, cooperative

• Sole proprietorship, corporation, franchise

• Partnership, corporation, franchise

Which form of business organization is described as being owned and run by one person?

• Partnership

• Corporation

• Sole proprietorship

• Cooperative

What is the main idea of the "Sole Proprietorships" section in the text?

• Sole proprietorships are the most common form of business organization in the United States.

• Sole proprietorships are the least common form of business organization in the United States.

• Sole proprietorships are the most complex form of business organization.

• Sole proprietorships require the most capital to start.

What is a common characteristic of sole proprietorships in terms of business size?

• They are usually large businesses

• They are usually small businesses

• They are usually multinational corporations

• They are usually government-owned

What is a common method for sole proprietors to raise financial capital?

• Issuing stocks

• Borrowing from family members

• Attracting venture capital

• Merging with other businesses

What is one advantage of online auctions mentioned in the text?

• They are slower than traditional auctions

• They have a limited range of products

• They allow buyers and sellers to trade directly

• They require physical presence

What is a key characteristic of preferred stock?

• It represents basic ownership of a corporation

• It usually receives no dividends

• It represents nonvoting ownership shares

• It allows the owner to elect the board of directors

What is the role of the board of directors in a corporation?

• To manage day-to-day operations

• To set broad policies and goals

• To elect the stockholders

• To handle financial transactions

What does limited liability mean for corporate stockholders?

• They are responsible for all of the corporation's debts.

• Their losses are limited to the money they invested in stock.

• They must manage the corporation's day-to-day operations.

• They must pay the corporation's taxes.

What is one of the main disadvantages of corporate ownership?

• Limited liability for owners.

• Ease of raising financial capital.

• Separation of ownership and management.

• Ability to hire professional managers.