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Business Ownership Pre/Practice Test

Total questions: 65

Worksheet time: 32mins

Name
Class
Date
1.
Only liable for up to the amount invested into the company, and has little to no voice in management.
a)
General Partner
b)
Proprietor
c)
Limited Partner
d)
Corporation
2.
What is the most common form of business ownership?
a)
Corporation
b)
Company
c)
Sole Proprietorship
d)
LLC
3.
What is a form of business ownership in which 2 or more people jointly owns a business
a)
Sole Proprietorship
b)
Company
c)
Partnerships
4.
What is the name of a person who owns part of a corporation?
a)
Stakeholder
b)
Shareholder
c)
Trust Agent
d)
Chairman
5.
What type of corporation combines the benefits of a partnership and a corporation?
a)
Limited Liability Company
b)
Trust
c)
Company
6.
This type of business is subject to many more laws and are more difficult to form.
a)
Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
7.
This type of business is subject to many more laws and are more difficult to form.
a)
Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
8.

Which of the following is a disadvantage of franchise?

a)

assistance from a parent company

b)

name recognition

c)

shared advertising expenses

d)

must follow parent company business structure

9.

Which of the following is NOT a type of business ownership?

a)

partnership

b)

sole proprietorship

c)

entrepreneurship

d)

franchise

10.

___________ are words, symbols, names or devices used to specify the source of the goods, and are used to differentiate them from others.

a)

copyrights

b)

patents

c)

licenses

d)

trademarks

11.

A _____ is the right or license to sell a company's product or service at a designated location; an example would be McDonalds.

a)

franchise

b)

partnership

c)

sold prprietorship

d)

corporation

12.

Which of the following is the unique name which identifies Internet sites and businesses?

a)

Trademark

b)

Domain name

c)

Patent

d)

Copyright

13.

Which of the following are protections provided to authors or original works such as literature?

a)

Trademarks

b)

Domain names

c)

patents

d)

copyrights

14.

Which of the following is a grant ofintelletual property rights to the inventor?

a)

trademark

b)

domain name

c)

patent

d)

copyright

15.

Which of the following is NOT an example of a service business mentioned in the presentation?

a)

lawn care

b)

clothing store

c)

Web design

d)

Carpet cleaning

16.

Which of the following is the money or other resources needed to pay for a part or parts of the company?

a)

investment

b)

purchasing cost

c)

grant

d)

finance

17.

Which of the following is the process of issuing loans in small amounts?

a)

macrolending

b)

microlending

c)

granting

d)

leasing

18.

Groups of individuals who invest money in various types of companies in search of making a profit are known as which of the following?

a)

investors

b)

capitalists

c)

socialists

d)

investing entrepreneurs

19.

Which of the following is money borrowed from a business or investment which must be repaid over time with interest?

a)

equity capital

b)

venture capital

c)

debt capital

d)

investment capital

20.

It is the process of running a business in order to make a profit.

a)

ENTREPRENEURSHIP

b)

ENTREPRENEUR

c)

BUSINESSMAN

d)

EMPLOYEE

21.

He/ she founds and runs a small business, assuming all the risks and rewards of the venture.

a)

ENTREPRENEUR

b)

EMPLOYEE

c)

COMPANY

d)

ENTREPRENEURSHIP

22.

TRUE or FALSE: A franchisor is a person/ company that grants a franchisee a license for the conducting another business branch.

a)

TRUE

b)

FALSE

23.

Franchising: The franchisor gives you support

a)

Advantage

b)

Disadvantage

24.

A sole proprietor has to share the profits made by the business. True or False?

a)

True

b)

False

25.

Partnerships are set up by....

a)

One person

b)

Two or more people

c)

Ten or more people

d)

Twenty or more people

26.

A sole trader is responsible for all the debts of the business. True or False?

a)

True

b)

False

27.

What type of ownership could a franchise have?

a)

Sole trader

b)

Partnership

c)

Ltd. Company

d)

All of the above

28.

A franchisee can choose to sell products not supplied by the franchisor. True or False?

a)

True

b)

False

29.
What do business owners consider when they select a business ownership structure?
a)
Personal circumstances, type of business, and product mix
b)
Product versatility, financial needs, and advertising strategies
c)
Personal circumstances, financial needs, and type of business
d)
Product versatility, advertising strategies, and personal circumstances
30.
What type of corporation sells millions of shares and must furnish complete information about its earnings, assets, and debts?
a)
C Corporation
b)
S Corporation
c)
Private
d)
Limited
31.
A type of state-chartered corporation that was developed to help small businesses by taxing them as individuals in a partnership is a(n) __________ corporation.
a)
S Corporation
b)
C Corporation
c)
Private
d)
Limited
32.
The American Red Cross is an example of a(n) ___________ corporation.
a)
Hybrid
b)
Nonprofit
c)
S Corporation
d)
C Corporation
33.
One of the characteristics of the form of business ownership known as an LLC is that
a)
This kind of business can last indefinitely.
b)
It is required to have at least three owners (members).
c)
The IRS collects taxes based on the LLC�s gross income.
d)
The owners' personal property cannot be taken to pay the business�s debts.
34.
Wendy's sells the right to operate its restaurants to individuals who meet the company's criteria. The arrangement between Wendy's and these individuals is an example of
a)
A partnership agreement
b)
Multi-level marketing
c)
Licensing
d)
Franchising
35.
Jane is the owner of a pizza shop associated with a national chain of pizza restaurants. She established her business in a regional supermarket. The pizza shop is referred to as a
a)
Host franchise
b)
Strategic alliance
c)
Master licensee
d)
Piggyback franchise
36.
Olivia runs a home-based business that distributes high quality, handmade baskets. She sells the products and earns commissions on the baskets sold by four other basket representatives. This is an example of:
a)
Product licensing
b)
Product trade-name franchising
c)
Multi-level marketing
d)
Strategic partnering
37.
Illegally run organizations that emphasize the collection of high fees from potential product distributors are often referred to as
a)
Pyramid schemes
b)
Pressure-cooker tactics
c)
Marketing racket
d)
Deceptive advertising gimmicks
38.
ABC Specialty Wear is the only company that has written permission to use a national football team�s logo on its sportswear. This is an example of a
a)
Product trade-name
b)
Sole proprietorship
c)
Contract licensing agreement
d)
Limited joint-venture contract
39.
Which of the following statements is true regarding joint ventures:
a)
Joint-venture arrangements are usually short-term relationships.
b)
Joint ventures are used only when it is necessary to raise a lot of capital.
c)
Large corporations are the only business structures that can benefit from joint ventures.
d)
An independent attorney must always be consulted before signing a joint-venture agreement.
40.

Retailers get their goods from

a)

Wholesalers

b)

Consumers

c)

Dealers

d)

Partnerships

41.

A dividend is

a)

The cost of a share of stock

b)

The money lost on a share of stock

c)

A tax paid by stockholders

d)

The money made as a result of owning a share of stock.

42.

Processed goods include all of the following EXCEPT

a)

White sugar

b)

Organic vegetables

c)

Steel

d)

Gasoline

43.

An example of a franchise is

a)

a WalMart superstore

b)

a sears department

c)

a McDonald's resturant

d)

a "mom" and "pop" store

44.

The process of planning, pricing, promoting, selling, and distributing ideas, goods, and services is known as

a)

financing

b)

accounting

c)

marketing

d)

procurement

45.

Nonprofit organizations

a)

outnumber sole proprietorships in the US

b)

must still pay taxes

c)

do not register with the government

d)

focus on providing services rather than making a profit

46.

Unlimited liability means

a)

The owner is responsible for the company's debt

b)

the owner must have insurance

c)

the owner shares the liability with the company's stockholders

d)

the owner is responsible for only accidents that occur on business property

47.

Consumers usually deal directly with

a)

distributors

b)

manufacturers

c)

wholesalers

d)

retailers

48.

One disadvantage that corporations face is

a)

double taxation

b)

the cost of raw materials

c)

competition

d)

enviormental laws

49.

3 types of business organizations

a)

sole proprietorships

b)

partnerships

c)

corporations

d)

cooperations

50.

Corporations pay taxes on their income and stockholders pay taxes on dividends recieved. This is called

a)

taxation

b)

double taxation

c)

triple taxation

d)

quadruple taxation

51.

Manufacturers turn raw or processed goods into ______ ______

a)

finished goods

b)

unfinished goods

c)

cut goods

d)

uncut goods

52.

A major disadvantage of owning a sole proprietorship is that the owner has limited liability

a)

True

b)

False

53.

An advantage of owning a partnership is that banks are more often more willing to lend money to partnerships than to sole proprietorships.

a)

True

b)

False

54.

Personal economics are affected by government economics

a)

True

b)

False

55.

Anyone who works for a business is a(n)

a)

Employee

b)

Owner

c)

Contract service provider

d)

Customer

56.

You work at Chick-fil-A earning $8.25 per hour. Your weekly earnings are based solely on how many hours you work. This way of getting paid is called...

a)

A wage

b)

A salary

c)

A weekly contribution

d)

A gift from on high

57.

You just received your first paycheck from Chick-fil-A and want to make sure it is correct. You know you earn $8.25 per hour and you know you worked 21.5 hours last week. Which of the formulas below would you use to determine your pay?

a)

Rate x hours = pay

b)

Rate - hours = pay

c)

Pay - rate = hours

d)

Hours + Rate - Pay

58.

A predetermined amount of money paid to an employee stated as a weekly or yearly amount is a...

a)

Salary

b)

Wage

c)

Donation

d)

Insurance benefit

59.

If Jack …………………… the product, he ……………… it.

a)

isn’t like, won’t buy

b)

doesn’t like, won’t buy

c)

like, will

d)

likes, won’t buy

60.

FACTORS IN SELECTING A BUSINESS OWNERSHIP

a)

Capital, Personal assets, Span of control, Sharing of information

b)

Competitor, Personal assets, Span of control, Sharing of information

c)

Capacity, Personal assets, Span of control, Sharing of information

61.

Capital is defined as

a)

The amount of money/assets the owner invests into the business

b)

The first letter of a sentence

c)

The money the owner withdraws from the business

62.

One of the costs of being a sole trader is...

a)

Retains all profit

b)

Long hours of work

c)

Easy to establish

d)

Low start up costs

63.

A franchisee is the person who....

a)

Creates the original business idea and model.

b)

Buys the franchise from the original owner and operates it in their own town.

64.

Select TWO true statements that relate to a sole trader. (Select two answers)

a)

Sole traders have limited liability

b)

Sole traders get to make all their own decisions about the business

c)

Sole traders may find it harder to raise funds for the business

d)

Sole traders usually get more holidays than partners or directors

65.

what type of liability does a sole trader have

a)

Limited Liability

b)

Unlimited Liability

c)

yes

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