Question 1

Franchisees must follow more rules, regulations, and procedures than if they operated independently-owned businesses.

Accepted Answer

A) True 
 B)False  True

Question 2

An advantage of corporations is their ability to attract good talent by offering stock options and other employee benefits.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is normally considered a disadvantage of the corporate form of business?

Accepted Answer

A) Unlimited liability of owners. 
B)  Difficult transfer of ownership. 
C)  Limited life. 
D) Double taxation of earnings. 
A) Unlimited liability of owners. 
B)  Difficult transfer of ownership. 
C)  Limited life. 
D) Double taxation of earnings. D

Question 4

Jamie and Maria invested all their savings in a small pizzeria they opened outside the University of Western Kentucky. They operated the business as a general partnership. After 11 months, the business went broke and Jamie and Maria were left with outstanding bills of $37,500, which was more than their initial investment in the company. Jamie and Maria can:

Accepted Answer

A) Lose their personal assets as the result of their company's financial problems. 
B)  Lose only the funds they originally invested in their company. 
C)  Lose only the total value of the assets actually used to operate the business. 
D) Avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it. 
A) Lose their personal assets as the result of their company's financial problems. 
B)  Lose only the funds they originally invested in their company. 
C)  Lose only the total value of the assets actually used to operate the business. 
D) Avoid any liability for these debts since a partnership is considered to be a business entity that is separate and distinct from the partners who own it.

Question 5

A person who buys the right to use a business name and sell a product within a given territory is called a:

Accepted Answer

A) Stockholder. 
B) Franchisee. 
C)  Limited franchisor. 
D) Venture capitalist. 
A) Stockholder. 
B) Franchisee. 
C)  Limited franchisor. 
D) Venture capitalist.

Question 6

The Uniform Partnership Act is law in every state except Louisiana.

Accepted Answer

A) True 
 B)False

Question 7

It is impossible to run a franchise completely from home.

Accepted Answer

A) True 
 B)False

Question 8

One of the strengths of the sole proprietorship is its ability to sustain rapid growth by raising large amounts of financial resources.

Accepted Answer

A) True 
 B)False

Question 9

Halle wants to start a business. She has two goals. First, given her limited personal wealth and eagerness to get started, she wants to get her business up and running with the least possible hassle and expense. Second, she wants to minimize her personal risk in the event that her company experiences difficulties. If Halle chooses a sole proprietorship, she would:

Accepted Answer

A) Achieve both goals since this form of ownership is both the easiest to form and the least risky. 
B) Meet her first goal since sole proprietorships are easy and inexpensive to form. However, she would expose herself to personal risk because owners of sole proprietorships have unlimited liability. 
C)  Not achieve either goal since proprietorships are both costly to set up and subject to unlimited liability. 
D) Achieve her second goal, since the owners of sole proprietorships are legally protected from losing more than the amount they invest in 
A) Achieve both goals since this form of ownership is both the easiest to form and the least risky. 
B) Meet her first goal since sole proprietorships are easy and inexpensive to form. However, she would expose herself to personal risk because owners of sole proprietorships have unlimited liability. 
C)  Not achieve either goal since proprietorships are both costly to set up and subject to unlimited liability. 
D) Achieve her second goal, since the owners of sole proprietorships are legally protected from losing more than the amount they invest in

Question 10

A company that loses its status as an S corporation may not reelect this status for at least 5 years.

Accepted Answer

A) True 
 B)False

Question 11

In a limited liability partnership, each partner's risk of losing personal assets is:

Accepted Answer

A)  Unlimited. 
B)  Limited to losses that result from his/her own acts and omissions and the acts and omissions of those who work under his/her supervision. 
C)  Determined entirely by the maximum loss provision established by the articles of co-partnership. 
D)  Nonexistent. 
A)  Unlimited. 
B)  Limited to losses that result from his/her own acts and omissions and the acts and omissions of those who work under his/her supervision. 
C)  Determined entirely by the maximum loss provision established by the articles of co-partnership. 
D)  Nonexistent.

Question 12

When two firms who do not participate in the same industries, for example a software company and a fast food restaurant company decide to merge, the result is called a merger.

Accepted Answer

A) vertical 
B)  horizontal 
C)  linear 
D) conglomerate 
A) vertical 
B)  horizontal 
C)  linear 
D) conglomerate

Question 13

States may levy special taxes on corporations that are not imposed on other businesses.

Accepted Answer

A) True 
 B)False

Question 14

One difference between partnerships and sole proprietorships is that partnerships:

Accepted Answer

A) Take less work to form. 
B)  Are managed by an elected board of directors. 
C)  Have the advantage of limited liability. 
D) Have a greater chance of long term survival due to the accountability of each partner to the other. 
A) Take less work to form. 
B)  Are managed by an elected board of directors. 
C)  Have the advantage of limited liability. 
D) Have a greater chance of long term survival due to the accountability of each partner to the other.

Question 15

A cooperative consists of people with similar needs who pool their resources for mutual gain.

Accepted Answer

A) True 
 B)False

Question 16

An entrepreneur who wishes to start a business with little delay or hassle, and who wants to be his or her own boss, should organize the business as a:

Accepted Answer

A) Sole proprietorship. 
B)  Cooperative. 
C)  C corporation. 
D) General partnership. 
A) Sole proprietorship. 
B)  Cooperative. 
C)  C corporation. 
D) General partnership.

Question 17

the right to participate in managing the operations of the business.

Accepted Answer

A) True 
 B)False

Question 18

According to the Spotlight on Small Business box, titled, "Pick Your Partners Wisely", attributes such as trust and integrity are not something you should get overly concerned about when selecting partners, due to the fact that this is a business decision, not a friendly game of golf.

Accepted Answer

A) True 
 B)False

Question 19

A leveraged buyout is an attempt by top management to gain control of a company by issuing a large amount of new stock.

Accepted Answer

A) True 
 B)False

Question 20

The following companies: Blue Diamond, Ocean Spray, and Land O'Lakes are well known cooperatives.

Accepted Answer

A) True 
 B)False

Franchisees must follow more rules, regulations, and procedures than if they operated independently-owned businesses.

An advantage of corporations is their ability to attract good talent by offering stock options and other employee benefits.

Which of the following is normally considered a disadvantage of the corporate form of business?

A person who buys the right to use a business name and sell a product within a given territory is called a:

The Uniform Partnership Act is law in every state except Louisiana.

It is impossible to run a franchise completely from home.

One of the strengths of the sole proprietorship is its ability to sustain rapid growth by raising large amounts of financial resources.

A company that loses its status as an S corporation may not reelect this status for at least 5 years.

In a limited liability partnership, each partner's risk of losing personal assets is:

When two firms who do not participate in the same industries, for example a software company and a fast food restaurant company decide to merge, the result is called a merger.

States may levy special taxes on corporations that are not imposed on other businesses.

One difference between partnerships and sole proprietorships is that partnerships:

A cooperative consists of people with similar needs who pool their resources for mutual gain.

An entrepreneur who wishes to start a business with little delay or hassle, and who wants to be his or her own boss, should organize the business as a:

the right to participate in managing the operations of the business.

According to the Spotlight on Small Business box, titled, "Pick Your Partners Wisely", attributes such as trust and integrity are not something you should get overly concerned about when selecting partners, due to the fact that this is a business decision, not a friendly game of golf.

A leveraged buyout is an attempt by top management to gain control of a company by issuing a large amount of new stock.

The following companies: Blue Diamond, Ocean Spray, and Land O'Lakes are well known cooperatives.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

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Exam 5: How to Form a Business

Franchisees must follow more rules, regulations, and procedures than if they operated independently-owned businesses.

An advantage of corporations is their ability to attract good talent by offering stock options and other employee benefits.

Which of the following is normally considered a disadvantage of the corporate form of business?

A person who buys the right to use a business name and sell a product within a given territory is called a:

The Uniform Partnership Act is law in every state except Louisiana.

It is impossible to run a franchise completely from home.

One of the strengths of the sole proprietorship is its ability to sustain rapid growth by raising large amounts of financial resources.

A company that loses its status as an S corporation may not reelect this status for at least 5 years.

In a limited liability partnership, each partner's risk of losing personal assets is:

When two firms who do not participate in the same industries, for example a software company and a fast food restaurant company decide to merge, the result is called a merger.

States may levy special taxes on corporations that are not imposed on other businesses.

One difference between partnerships and sole proprietorships is that partnerships:

A cooperative consists of people with similar needs who pool their resources for mutual gain.

An entrepreneur who wishes to start a business with little delay or hassle, and who wants to be his or her own boss, should organize the business as a:

the right to participate in managing the operations of the business.

According to the Spotlight on Small Business box, titled, "Pick Your Partners Wisely", attributes such as trust and integrity are not something you should get overly concerned about when selecting partners, due to the fact that this is a business decision, not a friendly game of golf.

A leveraged buyout is an attempt by top management to gain control of a company by issuing a large amount of new stock.

The following companies: Blue Diamond, Ocean Spray, and Land O'Lakes are well known cooperatives.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Filters