Business Organizations Quiz

One of the ways a corporation can raise money is by:

• selling stock on the stock market

• buying bonds from other corporations

• seeking money from the government for research and development

• selling shares to the founders

What defines a corporation?

• a business that does international business

• a business with more than two owners

• a large business firm

• a business owned by individual stockholders

What percent of the net income earned in the United States is generated by corporations?

• 28

• 45

• 60

• 84

What percentage of all businesses are partnerships?

• 5 percent

• 10 percent

• 15 percent

• 20 percent

What is a major advantage of a business that is a partnership rather than a sole proprietorship?

• The responsibility for the business is shared.

• The business is easy to start up.

• The partners are not responsible for the business debts.

• The business is easy to sell.

All of the following are major advantages of a sole proprietorship EXCEPT:

• easy to start the business

• the owner has full control

• the possibility of fast, flexible decision making

• unlimited personal liability

Most large businesses are:

• sole proprietorships

• general partnerships

• corporations

• cooperatives

If a sole proprietorship fails, the owner of the business

• must pay all the business debts

• must pay off the investors

• has to do elaborate legal work to close the business

• can close the business with no payments to anyone

A major disadvantage of the sole proprietorship is

• the business cannot be sold if it does well

• the business can be difficult to relocate

• lack of permanence makes them less likely to be able to obtain funding

• no one can work for the business owner

A business owned and managed by a single individual