WorksheetsChapter 2 Test – Understanding Characteristics of Business
Total questions: 30
Worksheet time: 23mins
A business model explains how a company makes money.
True
False
A franchise allows another person to use the company’s name for free.
True
False
A subscription model charges customers one time only.
True
False
A sole proprietorship is owned by one person who keeps all profits.
True
False
Organizational design connects a company’s mission to its structure.
True
False
Which of the following is an example of a direct sales model?
Netflix
Avon representative
Spotify
Walmart
What is the main focus of the direct sales model?
Online advertising
Customer service and relationships
Manufacturing efficiency
Selling stock
Which of these is an example of the franchise model?
Amazon
Hilton Hotels
Spotify
Netflix
In a freemium model, what is the strategy?
Customers pay a flat fee
Services are free but extra features cost money
Customers invest in stock
Only nonprofits can use it
A business that charges monthly or yearly fees is using which model?
Subscription
Direct Sales
Freemium
Partnership
Which of the following is a not-for-profit organization?
Amazon
Walmart
Red Cross
Netflix
An advantage of a sole proprietorship is:
Easy to start
Unlimited liability
Difficult to get investors
Hard to manage
Which is a disadvantage of a sole proprietorship?
Keeps all profits
Unlimited liability
Easy to start
Low startup costs
What is an advantage of a partnership?
Limited liability
More money and combined skills
Hard to start
No disagreements
Who owns a corporation?
One person
Two or more partners
Stockholders
Members
In a corporation, owners have:
Unlimited liability
Limited liability
No liability
Self-employment tax
Which type of business allows owners to sell stock and earn dividends?
Sole Proprietorship
Partnership
Corporation
Limited Liability Company
A Limited Liability Company (LLC) provides which advantage?
Unlimited liability
Fewer rules and limited liability
Easy to sell stock
Dividends for members
What is one disadvantage of an LLC?
Easy to start
Hard to manage
Fees and self-employment tax
Unlimited liability
Cooperatives are owned by:
The government
Stockholders
A group of people who benefit from the business
One sole proprietor
A _______ is a plan for how a company makes money.
business model
marketing strategy
organizational chart
financial statement
The _______ model allows someone else to use a company’s name.
franchise
partnership
merger
subsidiary
In a _______ model, some services are free but extras cost money.
freemium
subscription
open-source
pay-per-use
Customers pay monthly or yearly fees in the _______ model.
subscription
transaction
freemium
advertising
A _______ is owned by one person.
sole proprietorship
partnership
corporation
cooperative
A _______ is owned by two or more people.
partnership
sole proprietorship
corporation
franchise
Stockholders own a _______.
corporation
partnership
sole proprietorship
franchise
A(n) _______ protects owners from company losses with limited liability.
corporation
partnership
sole proprietorship
cooperative
A _______ is owned by a group of people who benefit from it.
cooperative
corporation
franchise
sole proprietorship
_______ connects a company’s mission to its structure.
organization chart
balance sheet
marketing plan
cash flow statement
