Deck 10: Managing the Form of Business Ownership

Question 1

New businesses almost always fail for purely financial reasons.

Answer 1

False

Question 2

A business plan helps entrepreneurs see the risks and responsibilities involved in starting a business.

Answer 2

True

Question 3

Financing the business is one of the responsibilities of the business owner.

Answer 3

True

Question 4

A business with a balance sheet showing assets valued at $100,000 and capital valued at $100,000 is in a weak financial position.

Question 5

A partnership could be owned by as many as ten or more partners.

Question 6

Corporations usually have a tax advantage over partnerships.

Question 7

If one partner is unable to pay his or her portion of the business's debts, the other partners must pay it.

Question 8

A disadvantage of a partnership that fails is that a partner can lose personal assets in addition to the amount of money invested in the business.

Question 9

If a partner enters into a contract against the wishes of the other partners, the other partners are legally responsible for the contract.

Question 10

A partnership continues even after one partner dies.

Question 11

It is difficult to withdraw from a partnership.

Question 12

To form a corporation a charter is needed.

Question 13

A corporation can make contracts, borrow money, and be sued.

Question 14

Stockholders decide when dividends are to be distributed.

Question 15

A stockholder has the same financial responsibility as a partner.

Question 16

The stockholders make up the ruling body of a corporation.

Question 17

Each stockholder has only one vote regardless of the number of shares owned.

Question 18

A nonprofit corporation pays small dividends to shareholders.

Question 19

A cooperative provides members with both cost and profit advantages they would not have individually.

Question 20

Approximately how many new businesses fail within the first four to five years?

A) 5 percent
B) 25 percent
C) 50 percent
D) 75 percent

Question 21

Which one of the following statements is true about entrepreneurs?

A) Entrepreneurs would rather work for others.
B) Entrepreneurs prefer to assign the decision-making responsibility to employees.
C) Entrepreneurs usually work hard and for long hours.
D) Entrepreneurs usually give up quickly when their businesses are not immediately successful.

Question 22

If assets are valued at $500,000 and capital amounts to $350,000, the liabilities of the business are

A) $850,000
B) $500,000
C) $350,000
D) $150,000

Question 23

In a sole proprietorship,

A) creditors have first claim against assets
B) there are no employees
C) assets are safe from creditors
D) employees share in the liabilities

Question 24

One of the main reasons many proprietorships fail within a short time is that

A) the owner lacks needed skills
B) the owner lacks interest in the business
C) proprietorships are not able to compete with corporations any longer
D) proprietorships are not able to compete with partnerships

Question 25

The type of business that can be operated suitably as a proprietorship is one that

A) requires a great amount of capital
B) usually does not provide personal services
C) usually operates on a large scale
D) can be managed by the proprietor or by persons hired by the proprietor

Question 26

An advantage of partnerships when compared to proprietorships is

A) if one partner disagrees with a change, the partnership cannot make the change
B) all partners are bound by all contracts made by the partnership
C) operations are usually less efficient because of shared management
D) more capital is usually available

Question 27

In which type of partnership is the liability of a partner limited to the amount of the partner's investment?

A) limited partnership
B) unlimited partnership
C) restricted partnership
D) unrestricted partnership

Question 28

In a limited partnership

A) all partners must be general partners
B) no partners are liable for any of the partnership's debts
C) all partners must be limited partners
D) at least one partner must be a general partner with unlimited liability

Question 29

An official document giving power to run a corporation is a

A) partnership agreement
B) charter
C) proxy
D) business plan

Question 30

A corporation is authorized to act as if it were a single person by the

A) federal government
B) board of directors
C) state in which it is incorporated
D) business plan

Question 31

Ownership of a corporation is measured in

A) assets
B) equity
C) dividends
D) shares

Question 32

If the corporation fails, stockholders are responsible for

A) all of the debts of the corporation
B) only the amount owed in dividends
C) only the amount invested in the corporation
D) only the value of the assets of the corporation

Question 33

A stockholder who cannot attend a shareholders' meeting can submit votes by

A) contract
B) dividend
C) proxy
D) waiver

Question 34

An agreement among two or more businesses to work together to provide a good or service is called a

A) limited liability partnership
B) limited liability corporation
C) joint venture
D) cooperative

Question 35

An advantage of corporations in relation to partnerships is that

A) corporations have tax advantages
B) corporations have unlimited life
C) shareholders have unlimited financial liability
D) shareholders can transfer ownership easily

Question 36

A written agreement between two or more people identifying how they will add capital, labor, or other assets and divide any profits or share any losses in their business is called a

A) certificate of incorporation
B) business plan
C) charter
D) partnership agreement

Question 37

A nonprofit corporation is an organization that

A) pays taxes and exist to make a profit
B) pays taxes and does not exist to make a profit
C) does not pay taxes and does not exist to make a profit
D) pays dividends to shareholders

Question 38

Quasi-public corporations are often supported by

A) subsidies
B) stocks
C) dividends
D) tariffs

Question 39

Match each item with the correct statement below.

-A written document that describes how to achieve the goals of a business.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 40

Match each item with the correct statement below.

-Owners of a corporation.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 41

Match each item with the correct statement below.

-Property owned by a business.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 42

Match each item with the correct statement below.

-Parties who have first claim against assets.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 43

Match each item with the correct statement below.

-A statement of financial position.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 44

Match each item with the correct statement below.

-Money owed by a business.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 45

Match each item with the correct statement below.

-Difference between assets and liabilities.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 46

Match each item with the correct statement below.

-An employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product, process, or service.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 47

Match each item with the correct statement below.

-Top executive who is hired to manage a business.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders

Question 48

Match each item with the correct statement below.

-Corporation that does not offer its shares of stock for public sale.

A)Assets
B)balance sheet
C)business plan
D)Capital
E)charter
F)close corporation
G)creditors
H)entrepreneur
I)income statement
J)intrapreneur
K)liabilities
L)officer
M)open corporation
N)stockholders