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3B Business Basics Test

Total questions: 40

Worksheet time: 34mins

Name
Class
Date
1.
The easiest form of business to start and end is a(n)
a)
limited liability partnership
b)
S corporation
c)
franchise
d)
proprietorship
2.
What is a disadvantage of a friends and family loan?
a)
It means you have no savings
b)
It can lead to personal conflicts
c)
It can take a long time to arrange
d)
They can be recalled immediately
3.

What is the most likely source of finance for a small firm?

a)

A debenture

b)

Issuing shares

c)

A bank loan

4.
The source of finance that is provided by the Owners is called 
a)
Capital
b)
Overdraft
5.
Which of the following is the most suitable reason for using personal finance?
a)
Insufficient internal sources of finance
b)
Insufficient external sources of finance
c)
There is no interest obligation
d)
To please the owners (shareholders) of a company
6.

_______ refers to a portion of profit that is reinvested in a business.

a)

Loan

b)

Capital

c)

Retained earnings

d)

overdraft

7.

Which of the following is an example of debt capital?

a)

Bank loan

b)

Personal savings

c)

retained profit

d)

All of the above

8.

All partnerships must be 50 - 50?

a)

True

b)

False

9.

Items that can be seen and touched are known as...

a)

Goods

b)

Services

10.

People who are part owners of a company are known as...

a)

Stakeholders

b)

Shareholders

c)

Customers

d)

People

11.

A business that is owned and operated by a single person is known as a...

a)

Partnership

b)

Sole trader

c)

Private company

d)

Public company

12.

The owner of a business being responsible for all debts is known as....

a)

Limited liability

b)

Unlimited liability

13.

Another word for a businesses sales is

a)

profit

b)

revenue

c)

worth

d)

equity

14.

Which of the following functional areas of a business is most likely to be responsible for recruiting new staff?

a)

Business support services

b)

Finance

c)

Human resources

d)

Operations management

15.

Which of the following functional areas is most likely to be responsible for sourcing raw materials?

a)

Finance

b)

Operations management

c)

purchasing department

d)

Sales

16.

Which of the following functional areas is most likely to be responsible for sourcing raw materials?

a)

Finance

b)

Operations management

c)

purchasing department

d)

Sales

17.

Which of the following functional areas of a business is most likely to be responsible for producing a radio advertisement to raise awareness of its new product?

a)

Customer service

b)

Marketing

c)

Operations

d)

Sales

18.

In a large company the research and development function is most likely to work with the operations management function to:

a)

develop new manufacturing processes

b)

provide administrative support

c)

recruit production operatives

d)

source cheaper raw materials

19.
Which phrase best describes a functional area?
a)
A department within a business
b)
A group of customers
c)
A supplier
d)
Different branches of business
20.
Which of the following is NOT a functional area?
a)
Finance
b)
Human Resources
c)
Customers
d)
Marketing
21.
An entrepreneur is someone 
a)
Someone who works for a new business
b)
Someone who starts a new business
c)
Someone who takes over an existing business
d)
Someone who does not want to work
22.
An entrepreneur must know...
a)
Only the parts of the business they like
b)
No parts of the business management
c)
all parts of business:  finance, marketing, etc.
23.
Name one of the reasons people become entrepreneurs.
a)
Feeling insecure
b)
They like to be the ONLY one doing everything
c)
They are doing what they enjoy
24.
An entrepreneur can own an online business...
a)
False - entrepreneurs can only create business in person
b)
True - there are companies online as well as in person
25.

Private Limited Companies have

a)

Limited Liability

b)

Unlimited Liability

26.

A sole trader gets to keep any profits made for themselves

a)

True

b)

False

27.

How many People can be in a Partnership?

a)

Unlimited

b)

2 only

c)

Between 2 & 20

d)

Between 2 & 10

28.

Which 2 of these types of organisations must share their profits?

a)

Sole Trader

b)

Private Limited Company

c)

Partnership

29.

1.1) Which one of the following statements describe a sole proprietor best?

a) There are two owners

b) The sole proprietor owns and manages the business alone

c) It can no longer be registered in South Africa

a)

a) There are two owners

b)

b) The sole proprietor owns and manages the business alone

c)

c) It can no longer be registered in South Africa

30.

1.1) Examples of a sole proprietor is:

a) Hairdressers

b) Dry cleaners

c) All of the above

a)

a) Hairdressers

b)

b) Dry cleaners

c)

c) All of the above

31.

1.1) Shareholders are:

a) A financial manager

b) All people who own shares in a company

c) People who work for the company

a)

a) A financial manager

b)

b) All people who own shares in a company

c)

c) People who work for the company

32.

What percentage of the profits in sole trader is the owner designated to?

a)

75%

b)

100%

c)

54%

d)

0%

33.
What is a disadvantage of partnerships?
a)
ease of formation
b)
owners share responsibilities
c)
limited liability
d)
possibility of personality conflict
34.

Owners have unlimited liability in:

a)

Sole traders ONLY

b)

Partnerships ONLY

c)

Companies ONLY

d)

Sole traders and Partnerships

e)

Private limited companies ONLY

35.
Why does a company issue shares?
a)
To raise money that can be invested in the business
b)
To make more profit
c)
To get more owners
d)
To allow the business to be sold off
36.
The Human Resources Department
a)
Manage People
b)
Help Develop Skills
c)
Hire and Fire
d)
All of these are correct
37.

(a)   can be people or organisation that buy a product.

38.

Consumers are people or organisation that

a)

Buy a good or service

b)

Buy and use a good or services

c)

Pay for a good or service without using it

d)

Use a good or service

39.
A product that is necessary for survival
a)
Want
b)
Need
40.
A product you would like to have but is not necessary for survival
a)
want
b)
need

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