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WorksheetsCFA Test Chpt. 6
Total questions: 40
Worksheet time: 33mins
There are three (3) main types of business organizations: sole proprietorships, partnerships, and corporations.
True
False
About half of all businesses in the United States are sole proprietorships.
True
False
Income from a corporation is taxed twice.
True
False
A major disadvantage of owning a sole proprietorship is that the owner has limited liability.
True
False
An advantage of owning a partnership is that banks are more often more willing to lend money to partnerships than to sole proprietorships.
True
False
The most common type of business in the United States are
corporations.
sole proprietorships.
partnerships.
“mom and pop” stores.
A dividend is
the cost of a share of stock.
a tax paid by stockholders.
the money made as a result of owning a share of stock.
the money lost on a share of stock.
Unlimited liability means
the owner is responsible for only accidents that occur on business property.
the owner is responsible for the company’s debts.
the owner must have insurance.
the owner shares the liability with the company’s stockholders.
An advantage of a partnership is
that the partners make decisions together.
that banks are often more willing to lend money to a partnership than to a sole proprietorship.
that the partners often bring different skills and talents to the business.
all of the above.
In order to start a corporation, the first thing one must do is
obtain a corporate charter from the state government.
hire an accountant and an attorney.
hire employees.
start bank accounts.
One disadvantage that corporations face is
competition.
environmental laws.
the cost of raw materials.
double taxation.
Nonprofit organizations
focus on providing services rather than making a profit.
outnumber sole proprietorships in the United States.
must still pay taxes.
do not register with the government.
An example of a franchise is
a McDonald’s restaurant
a “mom and pop” grocery store.
a Sears department store.
a Wal-Mart superstore.
Processed goods include all of the following except
organic vegetables.
white sugar.
steel.
gasoline.
Retailers get their goods from
consumers.
dealers.
wholesalers.
partnerships.
The process of planning, pricing, promoting, selling, and distributing ideas, goods, and services is known as
financing.
procurement.
accounting.
marketing.
Companies benefit when all functional areas
operate independently.
monitor each other.
work together.
belong to a union.
The process of achieving company goals by planning, organizing, directing, controlling, and evaluating the effective use of resources is called
production.
management.
marketing.
procurement.
Consumers usually deal directly with
manufacturers.
retailers.
wholesalers.
distributors.
Cooperatives were formed to
save money on the purchase of certain goods and services.
sell more products.
promote each other.
help people cooperate.
There are three main types of business organizations: sole proprietorships, partnerships, and
corporations
organizations
Partners share ____________________ legal and financial liability.
unlimited
limited
Corporations pay taxes on their income and stockholders pay taxes on dividends received. This is called _________________________.
taxed
double taxation.
In return for your investment, franchise fees, and a share of the profits, a franchiser offers a well-known name and a _________________________.
marketing strategy
business plan
Manufacturers turn raw or processed goods into _________________________.
finished goods
sold goods
Why is it easier for partnerships to obtain capital than it is for sole proprietorships?
What is the major advantage of a corporation? Why is this an advantage?
List three industries that produce raw goods.
List the five main functions involved in the operation of all types of businesses.
Explain the difference between finance and accounting.
A business that moves goods from one business to another
nonprofit organization
intermediary
business
travel
The business or art of money management
production
banks
finance
accounting
The owner is responsible for the company’s debts
liability
relative
ownership
unlimited liability
Also known as distributors
wholesaler
distributes
retail
sale
The process of creating, expanding, manufacturing, or improving goods and services
exspantion
production
building
creative
A type of business that focuses on providing a service, not on making a profit
growth
profit
nonprofit organization
management
An organization that is owned and operated by its members
cooperative
partners
friends
organization
The buying and reselling of goods that have already been produced
procurement
buying
selling
reselling
The process that involves getting consumers to buy a product or service
business
management
Finance
marketing
A contractual agreement to use the name and sell the products or services of a company in a designated geographic area
Saler
Franchise
Owner
Buyer
