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CHAPTER 3 (exercise)

Total questions: 100

Worksheet time: 2hrs 40mins

Name
Class
Date
1.

What is a Sole Proprietorship?

a)

Business owned by president

b)

Business owned by several companies

c)

Business owned by one person

d)

Business owned by a company

2.

Sole proprietorship business can be started by

a)

at least seven persons

b)

any one person

c)

at least two persons

d)

at least three persons

3.

Sole Proprietorship is most suitable for

a)

Medium scale concerns

b)

Large scale concerns

c)

Small scale concerns

d)

None of the above

4.

The reason for the end of the sole proprietorship can be

a)

Insolvency

b)

Insanity

c)

Death

d)

All the above

5.

Sole proprietorship business owner has

a)

Restricted Liability

b)

No Liability

c)

Unlimited Liability

d)

Limited Liability

6.

A sole proprietor has a limit in which of the following ability

a)

Managerial

b)

Owner

c)

Worker

d)

None of these

7.

A father who wants to take his son into the business with him should form this type of business.

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

8.
This type of business is owned by one person.
a)
Partnership
b)
Sole Proprietorship
c)
Corporation
d)
Franchise
9.
This type of business is owned by two or more people.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
10.
Advantages of this business type are that the owner is their own boss and gets to keep all the profits.
a)
Partnership
b)
Sole Proprietorship
c)
Corporation
d)
Franchise
11.

Sole proprietorship is most suitable for

a)

Medium scale concern

b)

Large scale concern

c)

Small scale concern

d)

All of the above

12.

Which of the following best describes the term limited liability? If the business fails:

a)

Personal possessions of the owner can be taken to pay any debts

b)

The owner is personally liable for all the debts of the business

c)

There is no limit on the amount the owner has to pay to settle debts

d)

The owner only loses the amount invested in the business

13.

It is a form of business ownership, where there is one owner who's responsible for the business.

a)

SOLE PROPRIETORSHIP

b)

PROPRIETORSHIP

c)

SOLE PREPRIOTERSHIP

d)

SOAL PROPREITORSHIP

14.
The type of business ownership in which all business decisions are the sole responsibility of the owner.
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
15.
These business owners may have trouble raising capital.
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
16.
Advantages of this business type are that the owner is their own boss and gets to keep all the profits.
a)
Partnership
b)
Sole Proprietorship
c)
Corporation
d)
Franchise
17.
Disadvantages for this type of business include: owner pays for everything, hard to get money to start from the bank, owner might lack skills & unlimited liability.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
18.
What is a major advantage of a business that is a partnership rather than a sole proprietorship?
a)
The responsibility for the business is shared
b)
The business is easy to set up
c)
The partners are not responsible for business debts
d)
The business is easy to sell
19.
What is a business owned and operated by two or more people?
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
20.
What is ONE advantage of a sole proprietorship?
a)
You make ALL the decisions
b)
Easy to raise money
c)
You have to share profits
21.
Which is ONE disadvantage of Sole Proprietorship?
a)
Less direct control
b)
Disagreements
c)
Hard to raise money
22.
Disadvantages include limited life and
the potential for conflict between partners
a)
Sole Propriotorship
b)
Partnership
c)
Corporation
23.
Sara’s Hair Palace is a small, locally owned beauty salon in Sterling. This represents what type of business?
a)
corporation
b)
partnership
c)
sole proprietorship
24.

The main disadvantage of a __________ is that each person is fully responsible for the acts of all other persons.

a)

Proprietorship

b)

Partnership

c)

Corporation

d)

Franchise

25.
What kind of business is BEST described by these statements?
I am the only owner of my business. 
I take all the risks of doing business. 
I keep all the profits. 
a)
proprietorship
b)
corporation
c)
partnership
d)
cooperative
26.

What is a business owned by stockholders/investors but operated by others?

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

d)

Limited Liability Partnership

27.

Which is ONE disadvantage of Sole Proprietorship?

a)

Less direct control

b)

Disagreements

c)

Hard to raise money

d)

Unlimited Life

28.

What is ONE advantage of a Corporation?

a)

Difficult to start

b)

Make all of the decisions

c)

Easy to raise money!

d)

Limited Life

29.

Disadvantages include limited life and

the potential for conflict between partners

a)

Sole Propriotorship

b)

Partnership

c)

Corporation

d)

Franchise

30.

Characteristics include owned by two or more people and may be general or limited

a)

Sole Propriotorship

b)

Partnership

c)

Corporation

d)

Franchise

31.

Advantages include limited liability for owners, unlimited life, and ease of transfer of ownership.

a)

Sole Propriotorship

b)

Partnership

c)

Corporation

d)

Franchise

32.
What is a disadvantage of partnerships?
a)
ease of formation
b)
owners share responsibilities
c)
limited liability
d)
possibility of personality conflict
33.
How is a general partnership organized?
a)
Every partner shares equally in both responsibility and liability
b)
The doctors, lawyers, or accountants who form a general partnership hire others to run the partnership
c)
No partner is responsible for the debts of the partnership beyond his or her investment
d)
Only one partner is responsible for the debts of the partnership
34.
Which of the following is a disadvantage of corporations:
a)
High taxes
b)
Unlimited life
c)
Unlimited liability
d)
financial power
35.
The owners of a corporation are called
a)
Directors
b)
Partners
c)
Shareholders
d)
Founders
36.

Shortest lifespan

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

d)

Limited Liability Partnership

37.

Ownership represented by stock

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

d)

Limited Liability Partnership

38.
What is the most common form of business ownership?
a)
Corporation
b)
Company
c)
Sole Proprietorship
d)
LLC
39.
What is a form of business ownership in which 2 or more people jointly owns a business
a)
Sole Proprietorship
b)
Company
c)
Partnerships
40.
What is the name of a person who owns part of a corporation?
a)
Stakeholder
b)
Shareholder
c)
Trust Agent
d)
Chairman
41.
This type of business is subject to many more laws and are more difficult to form.
a)
Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
42.
The major policy and financial decision makers of a corporation are determined by the...
a)
CEO/GM/President
b)
Chairman of the Board
c)
Shareholders
d)
Board of Directors
43.
Which of the following is an advantage of a partnership?
a)
Unlimited Liability
b)
Arguments
c)
Shared responsibility
d)
Less investors
44.
Owned by one individual.
a)
Proprietorship
b)
Partnership
c)
Corporation
d)
None of the above
45.
Owned by two or more individuals.
a)
Proprietorship
b)
Partnership
c)
Corporation
d)
None of the above
46.
Owners share the risks and the profits.
a)
Proprietorship
b)
Partnership
c)
Corporation
d)
None of the above
47.
This type of organization is a legal entity separate from its owners.
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
48.
Advantages of this business type are that the owner is their own boss and gets to keep all the profits.
a)
Partnership
b)
Sole Proprietorship
c)
Corporation
d)
Franchise
49.
The type of business ownership in which all business decisions are the sole responsibility of the owner.
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
50.
This type of business organization makes it easier to secure financing because more than one person may apply for credit.
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
51.
Business form with only one owner
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
52.
This type of business ownership is often entered into by people with complementary skills
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
53.
The Board of Directors control daily business operations for this type of business.
a)
Sole proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
54.

To start a partnership business, what should be the minimum number of partners?

a)

2

b)

10

c)

4

d)

20

55.

What type of agreement is used to form a partnership business?

a)

Written agreement

b)

Oral Agreement

c)

Written or Oral Agreement

d)

No Agreement required

56.

In partnership, partners liabilities are

a)

Limited

b)

Unlimited

c)

Limited to the capital invested

d)

Limited to the amount mentioned

57.

Which is not a feature of a partnership business?

a)

Easy Formation

b)

Mutual Agency

c)

Limited Liability

d)

Two or more person

58.

Sole Traders have

a)

Unlimited Liability

b)

Limited Liability

59.

Which of the following is the least complicated to set up?

a)

Sole Trader

b)

Partnership

c)

Private Limited Company

60.

How many People can be in a Partnership?

a)

Unlimited

b)

2 only

c)

Between 2 & 20

d)

Between 2 & 10

61.

Disadvantage of a Sole trader:

a)

Expensive to create

b)

Hard to employ people

c)

Doesn't generate much profit

d)

Unlimited liability

62.

An advantage of operating as a sole trader...

a)

Owner receives all profit

b)

No need to pay tax

c)

Investment from shareholders

d)

Cheaper advertising

63.
An advantage of a partnership...
a)
More profit for the owners
b)
Easier to recruit
c)
Shared responsibilities
d)
Unlimited liability
64.
Which of the following is a benefit of operating as a sole trader?
a)
Autonomy
b)
Higher sales
c)
Cheaper costs
d)
Easier to run
65.

True or false: If a business has unlimited liability, the owners personal possessions are at risk if the business falls into debt.

a)

True

b)

False

66.

Sole Traders have

a)

Unlimited Liability

b)

Limited Liability

67.
How many people can be in a partnership?
a)
2
b)
2-10
c)
2-20
d)
Unlimited
68.

Which of the following best describes the term limited liability? If the business fails:

a)

Personal possessions of the owner can be taken to pay any debts

b)

The owner is personally liable for all the debts of the business

c)

There is no limit on the amount the owner has to pay to settle debts

d)

The owner only loses the amount invested in the business

69.

Which of the following is a drawback for an entrepreneur setting up a business as a sole trader?

a)

Profit is shared

b)

Financial accounts are kept private

c)

Limited liability

d)

Unlimited liability

70.

Which legal structure would an individual wishing to start-up a small business choose because it is quick, easy and inexpensive to set up?

a)

Sole trader

b)

Partnership

c)

LTD

d)

PLC

71.

Which of the following is a disadvantage of setting up a business as a partnership?

a)

Shared losses

b)

Shared workload

c)

Shared profit

d)

More ideas generated

72.

There are four forms of business structures in Malaysia.

a)

TRUE

b)

FALSE

73.

Sole Proprietorship- a business which is solely owned by one person where management rests on that individual whose liability is unlimited.

a)

TRUE

b)

FALSE

74.

Sole Proprietorship- owner must disclose business affairs to general public

a)

TRUE

b)

FALSE

75.

Sole Proprietorship- owner is totally responsible for any debts incurred by the business

a)

TRUE

b)

FALSE

76.

Sole Proprietorship- unlimited liability because if the business fails or bankrupt, the creditors are entitled to seize and sell the owner's possessions.

a)

TRUE

b)

FALSE

77.

Partnership- maximum number of partners is 20.

a)

TRUE

b)

FALSE

78.

Partnership- not required by the partnership Act.

a)

TRUE

b)

FALSE

79.

Partnership- the risk cannot be reduced

a)

TRUE

b)

FALSE

80.

Partnership- each partner is liable for the debts of the business, regardless of which partner is at fault

a)

TRUE

b)

FALSE

81.

Partnership- better management because combination of skills and knowledge.

a)

TRUE

b)

FALSE

82.

Which of these statements is NOT one of the

disadvantages of Sole Proprietorship:

a)

Limited resources

b)

The liability is limited

c)

Future development is limited due to limited

management capability

d)

The life span of the business is depend upon the age and for capability of the owner

e)

The owner solely responsible for all tasks

83.

A partnership is governed by the …………

a)

Registration of Business Act 1956

b)

Cooperative Act 1948

c)

Companies Act 1956

d)

Partnership Act 1961

e)

Companies Act 1965

84.

Which of the following are challenges of a family business?


i. The founder often face dilemma in letting go ownership of his business to the next generation

ii. The successor needs to choose the appropriate entity to register the business

iii. The new family owner must investigate the business performance before taking over to ensure a good track record

iv. There could be conflict arises among the siblings during the takeover process

v. The older generation may face difficulties in choosing the right and competent successors among the family members

a)

I, II and III

b)

I, II and IV

c)

I, IV and V

d)

I, II, IV and V

e)

I, III, IV and V

85.

__________ owns in the corporation business.

a)

Stakeholders

b)

Shareholders

86.

In _________ managers and owners are separate.

a)

partnership

b)

corporation

87.

In partnership business, the owner's liability is _________

a)

limited

b)

unlimited

88.

Which type of business organisation is the most popular and suitable for Small business.

a)

a) Joint Hindu Family

b)

b) Sole Proprietorship

c)

c) Partnership

d)

d) Cooperative society

89.

Which form of organisation is suitable if direct control over operations & absolute decision making power is required in business?

a)

a) Joint Stock Co.

b)

b) cooperative society

c)

c) Sole proprietorship

d)

d) HUF

90.

What kind of business is BEST described by these statements?

I am the only owner of my business.

I take all the risks of doing business.

I keep all the profits.

a)

Partnership

b)

Cooperative

c)

Corporation

d)

Sole proprietorship

91.

A form of business organization that is authorized to act as a legal entity regardless of the number of owners.

a)

Company

b)

Partnership

c)

Sole proprietorship

d)

Distributor

92.

What is a disadvantage of a partnership?

a)

Ease of formation

b)

Limited liability

c)

Owners share responsibilities

d)

Possibility of personality conflict

93.

Law firms, medical practices, and auto body repair shops are examples of what type of ownership?

a)

Sole proprietorship

b)

Franchise

c)

Partnership

d)

Corporation

94.

What type of business structure is owned by many people?

a)

Company

b)

Sole proprietorship

c)

Partnership

d)

Firm

95.

Nike, Fashion Valet, and Google are examples of

a)

Partnership

b)

Sole proprietorship

c)

Company

d)

Self business

96.

A company is a ___

a)

sole proprietorship

b)

corporation

c)

partnership

d)

business option

97.

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

a)

The responsibility of the business is shared equally

b)

The partners are not responsible for business debts

c)

The business is easy to set up

d)

The business is easy to sell

98.

The registration of partnership business is governed by ____.

a)

Partnership Act 1961

b)

Registration of Partnership Act 1956

c)

Registration of Business Act 1956

d)

Companies Act 1965

99.

The following statements are the similarities between sole-proprietorship and partnership business EXCEPT _____.

a)

the liability is unlimited

b)

the setting up of business requires a formal agreement

c)

there is no separate legal entity between the members and the business

d)

the business is registered under Registration of Business Act 1956

100.

"Jojo and Koko jointly owns a house. They decided to rent out the house for RM1000 monthly. The profit from the rent is divided equally between them. They decided to use the profit from the rent to set up a bakery."


From the above statement, are Jojo and Koko partners with regards to the bakery business?

a)

Yes

b)

No

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