Question 1

One of the biggest trends in franchising for the past several years has been an expansion into overseas markets.

Accepted Answer

A) True 
 B)False  True

Question 2

If the owner of a sole proprietorship dies, the company legally ceases to exist.

Accepted Answer

A) True 
 B)False  True

Question 3

Historically, what have been the three basic forms of business ownership in Canada?

Accepted Answer

A)  full partnership, nominal partnership, and silent partnership 
B)  joint venture, cooperative, and holding company 
C)  sole proprietorship, partnership, and corporation 
D)  monopoly, duopoly, and oligopoly 
A)  full partnership, nominal partnership, and silent partnership 
B)  joint venture, cooperative, and holding company 
C)  sole proprietorship, partnership, and corporation 
D)  monopoly, duopoly, and oligopoly C

Question 4

What does the franchisor do for the franchisee?

Accepted Answer

A)  It pays royalties and fees to the franchisees. 
B)  It allows franchisees to operate loosely, as long as they are profitable. 
C)  It owns all of the franchise outlets but leases them to the franchisees. 
D)  It provides the franchisees with management training and support. 
A)  It pays royalties and fees to the franchisees. 
B)  It allows franchisees to operate loosely, as long as they are profitable. 
C)  It owns all of the franchise outlets but leases them to the franchisees. 
D)  It provides the franchisees with management training and support.

Question 5

As far as the law is concerned, a sole proprietorship is a legal separate entity.

Accepted Answer

A) True 
 B)False

Question 6

What is a sole proprietorship? Identify and explain two advantages and two disadvantages of sole proprietorships.

Accepted Answer

A sole proprietorship is a business that

Question 7

Justin Lapierre decided to operate his own Web design firm and is leaning toward organizing it as a sole proprietorship. What is one factor Justin should realize in choosing this form of business?

Accepted Answer

A)  He will be creating a business that is legally separate and distinct from himself. 
B)  He will be required to fill out special forms and pay proprietorship fees to get the company legally established. 
C)  He will incur the problem of double taxation. 
D)  He will be exposing himself to unlimited personal liability for the company's debts. 
A)  He will be creating a business that is legally separate and distinct from himself. 
B)  He will be required to fill out special forms and pay proprietorship fees to get the company legally established. 
C)  He will incur the problem of double taxation. 
D)  He will be exposing himself to unlimited personal liability for the company's debts.

Question 8

Sue has a great idea for a business but has limited financial assets. She wants to retain control over the management of the company, but she needs someone to provide additional financing. Her friend Tom has some money to invest and likes Sue's idea. He would like to share in any profits, but he doesn't have the time for or interest in managing the company and is nervous about the liability involved in running a business. What type of ownership structure would best suit both Sue and Tom?

Accepted Answer

A)  foreign corporation 
B)  general partnership 
C)  sole proprietorship 
D)  limited partnership 
A)  foreign corporation 
B)  general partnership 
C)  sole proprietorship 
D)  limited partnership

Question 9

A limited partnership is a partnership that includes at least one general partner and one limited partner.

Accepted Answer

A) True 
 B)False

Question 10

Corporations are more closely regulated and required to file more paperwork than other forms of business.

Accepted Answer

A) True 
 B)False

Question 11

The success of a franchisee can be adversely affected by the irresponsible or incompetent behaviour of the franchisor and other franchisees.

Accepted Answer

A) True 
 B)False

Question 12

Corporations that operate in two provinces must incorporate under federal incorporation.

Accepted Answer

A) True 
 B)False

Question 13

What is franchising? What is the relationship between a franchisor and franchisee? Describe at least one advantage and one disadvantage of franchising for the franchisor, and at least one advantage and disadvantage for the franchisee.

Accepted Answer

Franchising is an ongoing contractual re

Question 14

Owners of sole proprietorships are personally responsible for any debts incurred by their business.

Accepted Answer

A) True 
 B)False

Question 15

What is a cooperative? Why is one formed? Provide an example of one co-op in existence today.

Accepted Answer

Cooperatives are owned by their members

Question 16

Which of the following is a key advantage of a sole proprietorship?

Accepted Answer

A)  The owner has limited liability for the debts for this type of business. 
B)  It is easy and inexpensive to form this type of business. 
C)  The business has a perpetual life. 
D)  It is very easy to raise financial capital for this type of business. 
A)  The owner has limited liability for the debts for this type of business. 
B)  It is easy and inexpensive to form this type of business. 
C)  The business has a perpetual life. 
D)  It is very easy to raise financial capital for this type of business.

Question 17

Identify and discuss five disadvantages of operating a business as a sole proprietorship.

Accepted Answer

Limited financial resources: Raising mon

Question 18

Which of the following is a disadvantage of corporations as a form of business ownership?

Accepted Answer

A)  Their growth is limited because of difficulties in raising financial capital. 
B)  It is easy to start up and shut down. 
C)  They are subject to single taxation. 
D)  They are more expensive and complex to form than most other types of business. 
A)  Their growth is limited because of difficulties in raising financial capital. 
B)  It is easy to start up and shut down. 
C)  They are subject to single taxation. 
D)  They are more expensive and complex to form than most other types of business.

Question 19

In a general partnership, all owners have unlimited liability for the debts and obligations of their firm.

Accepted Answer

A) True 
 B)False

Question 20

What is the objective of forming a vertical merger?

Accepted Answer

A)  increasing size and market power within industry 
B)  providing tighter integration of production and increased control over supply of crucial inputs 
C)  reducing risk by making the firm less vulnerable to adverse conditions in any single market 
D)  transferring total or partial ownership of assets to investors 
A)  increasing size and market power within industry 
B)  providing tighter integration of production and increased control over supply of crucial inputs 
C)  reducing risk by making the firm less vulnerable to adverse conditions in any single market 
D)  transferring total or partial ownership of assets to investors

One of the biggest trends in franchising for the past several years has been an expansion into overseas markets.

If the owner of a sole proprietorship dies, the company legally ceases to exist.

Historically, what have been the three basic forms of business ownership in Canada?

What does the franchisor do for the franchisee?

As far as the law is concerned, a sole proprietorship is a legal separate entity.

What is a sole proprietorship? Identify and explain two advantages and two disadvantages of sole proprietorships.

Justin Lapierre decided to operate his own Web design firm and is leaning toward organizing it as a sole proprietorship. What is one factor Justin should realize in choosing this form of business?

A limited partnership is a partnership that includes at least one general partner and one limited partner.

Corporations are more closely regulated and required to file more paperwork than other forms of business.

The success of a franchisee can be adversely affected by the irresponsible or incompetent behaviour of the franchisor and other franchisees.

Corporations that operate in two provinces must incorporate under federal incorporation.

What is franchising? What is the relationship between a franchisor and franchisee? Describe at least one advantage and one disadvantage of franchising for the franchisor, and at least one advantage and disadvantage for the franchisee.

Owners of sole proprietorships are personally responsible for any debts incurred by their business.

What is a cooperative? Why is one formed? Provide an example of one co-op in existence today.

Which of the following is a key advantage of a sole proprietorship?

Identify and discuss five disadvantages of operating a business as a sole proprietorship.

Which of the following is a disadvantage of corporations as a form of business ownership?

In a general partnership, all owners have unlimited liability for the debts and obligations of their firm.

What is the objective of forming a vertical merger?

Business Now: Change Is the Only Constant

Business Ethics and Social Responsibility: Doing Well by Doing Good

Economics: The Framework for Business

The World Market-Place: Business Without Borders

Small Business and Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Finance: Acquiring and Using Funds to Maximize Value

Financial Markets: Allocating Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

Human Resource Management: Building a Top-Quality Workforce

Managing Information and Technology: Finding New Ways to Learn and Link

Operations Management: Putting It All Together

Business Communication: Creating and Delivering Messages That Matter

Labour Unions and Collective Bargaining

Business Law

Personal Finance

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Exam 5: Business Formation: Choosing the Form That Fits

One of the biggest trends in franchising for the past several years has been an expansion into overseas markets.

If the owner of a sole proprietorship dies, the company legally ceases to exist.

Historically, what have been the three basic forms of business ownership in Canada?

What does the franchisor do for the franchisee?

As far as the law is concerned, a sole proprietorship is a legal separate entity.

What is a sole proprietorship? Identify and explain two advantages and two disadvantages of sole proprietorships.

Justin Lapierre decided to operate his own Web design firm and is leaning toward organizing it as a sole proprietorship. What is one factor Justin should realize in choosing this form of business?

A limited partnership is a partnership that includes at least one general partner and one limited partner.

Corporations are more closely regulated and required to file more paperwork than other forms of business.

The success of a franchisee can be adversely affected by the irresponsible or incompetent behaviour of the franchisor and other franchisees.

Corporations that operate in two provinces must incorporate under federal incorporation.

What is franchising? What is the relationship between a franchisor and franchisee? Describe at least one advantage and one disadvantage of franchising for the franchisor, and at least one advantage and disadvantage for the franchisee.

Owners of sole proprietorships are personally responsible for any debts incurred by their business.

What is a cooperative? Why is one formed? Provide an example of one co-op in existence today.

Which of the following is a key advantage of a sole proprietorship?

Identify and discuss five disadvantages of operating a business as a sole proprietorship.

Which of the following is a disadvantage of corporations as a form of business ownership?

In a general partnership, all owners have unlimited liability for the debts and obligations of their firm.

What is the objective of forming a vertical merger?

Business Now: Change Is the Only Constant

Business Ethics and Social Responsibility: Doing Well by Doing Good

Economics: The Framework for Business

The World Market-Place: Business Without Borders

Small Business and Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Finance: Acquiring and Using Funds to Maximize Value

Financial Markets: Allocating Financial Resources

Marketing: Building Profitable Customer Connections

Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Management, Motivation, and Leadership: Bringing Business to Life

Human Resource Management: Building a Top-Quality Workforce

Managing Information and Technology: Finding New Ways to Learn and Link

Operations Management: Putting It All Together

Business Communication: Creating and Delivering Messages That Matter

Labour Unions and Collective Bargaining

Business Law

Personal Finance

Filters