Question 1

If a sole proprietorship fails, the owner may lose whatever was invested in the business, however, the owner's personal assets are not at risk.

Accepted Answer

A) True 
 B)False

Question 2

Although shares of master limited partnerships can be purchased on one of the national stock exchanges, these companies are taxed like partnerships.

Accepted Answer

A) True 
 B)False

Question 3

Any debts or damages incurred by a firm organized as a sole proprietorship are:

Accepted Answer

A) The responsibility of the owner. 
B)  Limited to the amount the owner has invested in the firm. 
C)  Paid for out of a reserve contingency fund that sole proprietors are required by law to set up. 
D) Normally covered by liability insurance. 
A) The responsibility of the owner. 
B)  Limited to the amount the owner has invested in the firm. 
C)  Paid for out of a reserve contingency fund that sole proprietors are required by law to set up. 
D) Normally covered by liability insurance.

Question 4

The owners of a corporation are known as general corporate partners.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is the most accurate? Sole proprietorships:

Accepted Answer

A)  Are well suited for people who want to own a business and share in its profits without taking an active role in management. 
B)  Are taxed at the owner's personal tax rate. 
C)  Is the least risky form of business ownership. 
D)  Must receive a state charter before they can legally conduct business. 
A)  Are well suited for people who want to own a business and share in its profits without taking an active role in management. 
B)  Are taxed at the owner's personal tax rate. 
C)  Is the least risky form of business ownership. 
D)  Must receive a state charter before they can legally conduct business.

Question 6

A franchise agreement is an arrangement where a franchisor sells the rights to a business name and the right to sell a product or service within a given territory to a franchisee.

Accepted Answer

A) True 
 B)False

Question 7

A legal entity with authority to act and have liability separate from its owners is called a partnership.

Accepted Answer

A) True 
 B)False

Question 8

A(n) is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory.

Accepted Answer

A) intrapreneur 
B)  franchisee 
C)  limited partner 
D) franchisor 
A) intrapreneur 
B)  franchisee 
C)  limited partner 
D) franchisor

Question 9

One of the major reasons for the wave of mergers in the late 1990s and early 2000s was the desire of firms to expand within their own markets.

Accepted Answer

A) True 
 B)False

Question 10

It is said that corporations have perpetual life.

Accepted Answer

A) True 
 B)False

Question 11

Kristen and her brothers and sisters decided to form a partnership that specializes in home design of all types. One their goals is to maintain the loving relationship they currently enjoy so they are following the Model Business Corporation Act recommendations as they write the partnership agreement. Which of the following is an accurate recommendation of the Act?

Accepted Answer

A) The business should be actively operating for an extended period before the partners decide who is responsible for what business functions. 
B)  Family businesses never take on outside partners, so no discussion of this need take place. 
C) There should be discussion and well-understood ways that the partners will handle disagreements. 
D) Due to the fact that they are all under 40 years old and expect to work until they are 65 there is no need to decide what will happen to the partnership if one decides to leave the business, retire, or die. 
A) The business should be actively operating for an extended period before the partners decide who is responsible for what business functions. 
B)  Family businesses never take on outside partners, so no discussion of this need take place. 
C) There should be discussion and well-understood ways that the partners will handle disagreements. 
D) Due to the fact that they are all under 40 years old and expect to work until they are 65 there is no need to decide what will happen to the partnership if one decides to leave the business, retire, or die.

Question 12

An owner of a corporation is known as a(n):

Accepted Answer

A) General partner. 
B)  Limited partner. 
C)  Director. 
D) Stockholder. 
A) General partner. 
B)  Limited partner. 
C)  Director. 
D) Stockholder.

Question 13

One of the major advantages for the franchisee is instant business name recognition and important management assistance from the franchisor.

Accepted Answer

A) True 
 B)False

Question 14

A is the share of profits or percentage of sales a franchisee pays to a franchisor.

Accepted Answer

A) royalty 
B)  dividend 
C)  premium 
D) co-pay 
A) royalty 
B)  dividend 
C)  premium 
D) co-pay

Question 15

When investors successfully take a firm private, the firm's stock is:

Accepted Answer

A) Converted into bonds. 
B)  Converted into cash. 
C) No longer sold to investors on the open market. 
D) Pledged as collateral to its bondholders. 
A) Converted into bonds. 
B)  Converted into cash. 
C) No longer sold to investors on the open market. 
D) Pledged as collateral to its bondholders.

Question 16

A multinational corporation is a firm that operates in several countries.

Accepted Answer

A) True 
 B)False

Question 17

To many businesspeople, one of the major attractions of a sole proprietorship is:

Accepted Answer

A) The ability to obtain additional financial resources. 
B)  The protection of limited liability. 
C)  An unlimited lifespan. 
D) The chance to be their own boss. 
A) The ability to obtain additional financial resources. 
B)  The protection of limited liability. 
C)  An unlimited lifespan. 
D) The chance to be their own boss.

Question 18

At one time there were many farm cooperatives, but more recently, they have been replaced by other forms of business ownership.

Accepted Answer

A) True 
 B)False

Question 19

Ted and Mark are partners in a dry cleaning business. They would like their brother Todd to join them. Unfortunately, partnership law states that only two partners can participate in a partnership.

Accepted Answer

A) True 
 B)False

Question 20

Kristen and her brothers and sisters set up a design firm called Houses by Design LLP. Although key business functions are centralized, each sibling is a licensed architect that designs, builds, and installs residential and commercial buildings for his/her own clients. Unfortunately, a design created and installed for one of their clients resulted in water damage to the basement of the client's new home. The limited liability partnership:

Accepted Answer

A) Guarantees that none of the company's partners will lose more than the amount they invested in the company. 
B) Guarantees that only those partners who were directly involved in designing and building this home face unlimited liability for claims against the firm. 
C)  Protects the partners from any suit by the client. 
D) Will enable the firm to quickly reorganize with only minor financial losses. 
A) Guarantees that none of the company's partners will lose more than the amount they invested in the company. 
B) Guarantees that only those partners who were directly involved in designing and building this home face unlimited liability for claims against the firm. 
C)  Protects the partners from any suit by the client. 
D) Will enable the firm to quickly reorganize with only minor financial losses.

If a sole proprietorship fails, the owner may lose whatever was invested in the business, however, the owner's personal assets are not at risk.

Although shares of master limited partnerships can be purchased on one of the national stock exchanges, these companies are taxed like partnerships.

Any debts or damages incurred by a firm organized as a sole proprietorship are:

The owners of a corporation are known as general corporate partners.

Which of the following statements is the most accurate? Sole proprietorships:

A franchise agreement is an arrangement where a franchisor sells the rights to a business name and the right to sell a product or service within a given territory to a franchisee.

A legal entity with authority to act and have liability separate from its owners is called a partnership.

A(n) is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory.

One of the major reasons for the wave of mergers in the late 1990s and early 2000s was the desire of firms to expand within their own markets.

It is said that corporations have perpetual life.

An owner of a corporation is known as a(n):

One of the major advantages for the franchisee is instant business name recognition and important management assistance from the franchisor.

A is the share of profits or percentage of sales a franchisee pays to a franchisor.

When investors successfully take a firm private, the firm's stock is:

A multinational corporation is a firm that operates in several countries.

To many businesspeople, one of the major attractions of a sole proprietorship is:

At one time there were many farm cooperatives, but more recently, they have been replaced by other forms of business ownership.

Ted and Mark are partners in a dry cleaning business. They would like their brother Todd to join them. Unfortunately, partnership law states that only two partners can participate in a partnership.

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

If a sole proprietorship fails, the owner may lose whatever was invested in the business, however, the owner's personal assets are not at risk.

Although shares of master limited partnerships can be purchased on one of the national stock exchanges, these companies are taxed like partnerships.

Any debts or damages incurred by a firm organized as a sole proprietorship are:

The owners of a corporation are known as general corporate partners.

Which of the following statements is the most accurate? Sole proprietorships:

A franchise agreement is an arrangement where a franchisor sells the rights to a business name and the right to sell a product or service within a given territory to a franchisee.

A legal entity with authority to act and have liability separate from its owners is called a partnership.

A(n) is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory.

One of the major reasons for the wave of mergers in the late 1990s and early 2000s was the desire of firms to expand within their own markets.

It is said that corporations have perpetual life.

An owner of a corporation is known as a(n):

One of the major advantages for the franchisee is instant business name recognition and important management assistance from the franchisor.

A is the share of profits or percentage of sales a franchisee pays to a franchisor.

When investors successfully take a firm private, the firm's stock is:

A multinational corporation is a firm that operates in several countries.

To many businesspeople, one of the major attractions of a sole proprietorship is:

At one time there were many farm cooperatives, but more recently, they have been replaced by other forms of business ownership.

Ted and Mark are partners in a dry cleaning business. They would like their brother Todd to join them. Unfortunately, partnership law states that only two partners can participate in a partnership.

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