Multiple Choice
Identify the choice that best completes the
statement or answers the question.
|
|
|
1.
|
How are partnerships and sole proprietorships alike?
a. | There is limited liability for the owners. | b. | They are regarded as
separate entities. | c. | They are easy and inexpensive to
start. | d. | There is a lot of government regulation. |
|
|
|
2.
|
Which statement is TRUE?
a. | Sole proprietorships make up most of the businesses in the U.S. and generate most of
the sales. | b. | Partnerships make up the least number of businesses in the U.S. but generate most of
the sales. | c. | Sole proprietorships and partnerships together generate about the same amount of
sales as corporations. | d. | Corporations generate most of the sales in the
U.S., but sole proprietorships make up most of the businesses. |
|
|
|
3.
|
A doctor misdiagnoses a serious illness. Her partners in the clinic are not
liable for her mistake. What kind of partnership do the doctor and her partners have?
a. | service cooperative | c. | limited partnership | b. | limited liability
partnership | d. | general
partnership |
|
|
|
4.
|
Your neighbor has just bought an auto repair franchise. What should he NOT
expect as a new franchise owner?
a. | freedom of choice in selecting products | c. | strict operating
standards | b. | management training and support | d. | financial
assistance |
|
|
|
5.
|
How are royalties and dividends alike?
a. | They are fees paid to franchisers. | c. | They are both kinds of
assets. | b. | They are both kinds of payments. | d. | They are discounts given to
consumers. |
|
|
|
6.
|
What is a major disadvantage to both sole proprietorships and general
partnerships?
a. | many government regulations | b. | double taxation | c. | the potential for
conflict | d. | the possibility of losing personal property |
|
|
|
7.
|
How do conglomerates and vertical mergers differ from horizontal mergers?
a. | They do not usually lessen competition in the marketplace. | b. | They increase
competition in the marketplace. | c. | They are not regulated by the
government. | d. | The new organizations formed from conglomerate and vertical mergers usually produce
better quality products. |
|
|
|
8.
|
Several office supply companies decide to combine into one large company. What
is this called?
a. | conglomerate | c. | horizontal merger | b. | vertical merger | d. | multinational
corporation |
|
|
|
9.
|
What does double taxation mean?
a. | Sole proprietorships and partnerships pay both personal income taxes and business
income taxes. | b. | Corporations pay income taxes on their profits, and stockholders pay taxes on their
dividends. | c. | For profit businesses must pay both income taxes and property
taxes. | d. | Nonprofit organizations are exempt from paying either income taxes or property
taxes. |
|
|
|
10.
|
How would you best compare the difference between closely held corporations and
publicly held corporations?
a. | A closely held corporation issues stock to just a few people; a publicly held
corporation issues stock to many people. | b. | Closely held corporations and publicly held
corporations are subject to different government regulations. | c. | Closely held
corporations have the same kinds of personal liability as general partnerships; publicly held
corporations have limited liability. | d. | Closely held corporations are easier and less
expensive to start up than publicly held corporations. |
|
Matching
|
|
|
Identifying Key Terms
Match each term with the correct
statement below. a. | assets | f. | professional
association | b. | business organization | g. | business license | c. | trade association | h. | corporation | d. | limited
partnership | i. | cooperative | e. | sole proprietorship | j. | bond |
|
|
|
11.
|
an establishment owned by two or more persons in which only one person has
unlimited personal liability for the business
|
|
|
12.
|
nonprofit association that promotes the interests of a particular
industry
|
|
|
13.
|
money and other valuables belonging to an individual or business
|
|
|
14.
|
a business owned and managed by a single individual
|
|
|
15.
|
a business organization owned and operated by a group of individuals for their
mutual benefit
|
|
|
16.
|
a legal entity owned by individual stockholders
|
|
|
17.
|
a certificate issued by a corporation promising to repay a loan with interest
to the buyer
|
|
|
18.
|
an establishment formed to carry on commercial enterprise
|