TMTQ - Chapter 6

Which of the following is NOT an advantage of a sole proprietorship?

• Ease of formation

• Limited liability for the owner

• Full control for the owner

• Tax benefits

Which of the following is a major disadvantage of a partnership?

• Ease of formation

• Shared profits

• Unlimited liability for general partners

• Shared decision-making

A key advantage of a corporation is:

• Unlimited liability for shareholders.

• Difficulty in raising capital.

• Limited liability for shareholders.

• Difficulty in transferring ownership.

Which of the following is a similarity between cooperatives and non-profits?

• Both are primarily motivated by profit maximization.

• Both have limited liability for their members.

• Both focus on serving a social or economic purpose.

• Both are easily formed and easily dissolved.

Which of the following best describes a "producer" in the context of business?

• A company that buys goods from wholesalers and sells them to consumers.

• A company that gathers raw materials from natural resources.

• A company that transforms raw materials into finished products.

• A company that facilitates the movement of goods from manufacturers to retailers.

A "retailer" primarily engages in which of the following activities?

• Extracting raw materials from the earth.

• Selling goods directly to consumers.

• Manufacturing finished products.

• Transporting goods between manufacturers and wholesalers.

Which of the following is NOT one of the five key functions of business?

• Production

• Marketing

• Finance

• Research & Development

• Procurement

How does the Production function interact with the Procurement function?

• Production determines the technical and quality specifications for raw materials, while Procurement sources those materials.

• Production is responsible for selling the finished goods, while Procurement handles customer service.

• Production and Procurement operate independently of each other.

• Production focuses on customer needs, while Procurement focuses on employee training.

How does the Marketing function interact with the Finance function?

• Marketing studies the market, while Finance manages the company's budget.

• Marketing has no direct relationship with the Finance function.

• Marketing identifies customer needs, while Finance provides the funds for marketing campaigns.

• Marketing focuses on production, while Finance focuses on customer service.

Which form of business ownership has the simplest and least expensive formation process?

• Corporation

• Partnership

• Sole Proprietorship

• Limited Liability Company (LLC)