Question 1

The owners of a limited liability company (LLC)must pay self-employment taxes on any profits they earn,even if they did not obtain a salary from the company.

Accepted Answer

A) True 
 B)False

Question 2

Most states have legal restrictions that prevent individuals from incorporating.

Accepted Answer

A) True 
 B)False

Question 3

It is impossible to run a franchise completely from home.

Accepted Answer

A) True 
 B)False

Question 4

To change ownership in a corporation you simply sell your stock to someone else.

Accepted Answer

A) True 
 B)False

Question 5

One of the major disadvantages of a sole proprietorship is the:

Accepted Answer

A) Possibility of disagreements between owners. 
B) Unlimited liability the owner has for the debts of the firm. 
C) Fact that any income earned by this type of business is taxed twice. 
D) High cost of starting or ending the company. 
A) Possibility of disagreements between owners. 
B) Unlimited liability the owner has for the debts of the firm. 
C) Fact that any income earned by this type of business is taxed twice. 
D) High cost of starting or ending the company.

Question 6

One advantage of a partnership is that there is a simple process for partners to terminate their business.

Accepted Answer

A) True 
 B)False

Question 7

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 8

A merger involving a software producer and a clothing manufacturer is an example of a:

Accepted Answer

A) Vertical merger. 
B) Horizontal merger. 
C) Linear merger. 
D) Conglomerate merger. 
A) Vertical merger. 
B) Horizontal merger. 
C) Linear merger. 
D) Conglomerate merger.

Question 9

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 10

A conglomerate merger will:

Accepted Answer

A) Diversify business operations and investments. 
B) Allow the firm to have a less dominant position in its market. 
C) Enable the firm to enjoy a higher degree of specialization. 
D) Give the firm a more secure access to needed materials and components and better control over quality. 
A) Diversify business operations and investments. 
B) Allow the firm to have a less dominant position in its market. 
C) Enable the firm to enjoy a higher degree of specialization. 
D) Give the firm a more secure access to needed materials and components and better control over quality.

Question 11

In a partnership,a(n)__________ partner (owner)actively manages the company and has unlimited liability for claims against the firm.

Accepted Answer

A) unlimited 
B) limited 
C) general 
D) associate 
A) unlimited 
B) limited 
C) general 
D) associate

Question 12

Jenna plans to invest in a cleaning service franchise called "Spare Time".At her first interview with the franchisor's selling agent,she learned that the parent company expects royalties of 5%.These are:

Accepted Answer

A) The initial investment,also known as the franchise fee paid to the franchisor. 
B) The cost of supplies that she will purchase one time each month from the parent company. 
C) Milestones that the parent company expects her to reach.With each milestone,she will be rewarded with commissions. 
D) A share of the profits or a percentage share of revenues (net sales). 
A) The initial investment,also known as the franchise fee paid to the franchisor. 
B) The cost of supplies that she will purchase one time each month from the parent company. 
C) Milestones that the parent company expects her to reach.With each milestone,she will be rewarded with commissions. 
D) A share of the profits or a percentage share of revenues (net sales).

Question 13

Compared to sole proprietorships,an advantage of partnerships is their ability to obtain more financial resources.

Accepted Answer

A) True 
 B)False

Question 14

The limited liability company requires a minimum of 10 members.

Accepted Answer

A) True 
 B)False

The owners of a limited liability company (LLC)must pay self-employment taxes on any profits they earn,even if they did not obtain a salary from the company.

Most states have legal restrictions that prevent individuals from incorporating.

It is impossible to run a franchise completely from home.

To change ownership in a corporation you simply sell your stock to someone else.

One of the major disadvantages of a sole proprietorship is the:

One advantage of a partnership is that there is a simple process for partners to terminate their business.

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.

A merger involving a software producer and a clothing manufacturer is an example of a:

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.

A conglomerate merger will:

In a partnership,a(n)__________ partner (owner)actively manages the company and has unlimited liability for claims against the firm.

Jenna plans to invest in a cleaning service franchise called "Spare Time".At her first interview with the franchisor's selling agent,she learned that the parent company expects royalties of 5%.These are:

Compared to sole proprietorships,an advantage of partnerships is their ability to obtain more financial resources.

The limited liability company requires a minimum of 10 members.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

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

Bonus A: Using Technology to Manage Information

Bonus B: Managing Risk

Bonus C: Managing Your Personal Finances

Appendix: Working Within the Legal Environment

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Exam 5: How to Form a Business

The owners of a limited liability company (LLC)must pay self-employment taxes on any profits they earn,even if they did not obtain a salary from the company.

Most states have legal restrictions that prevent individuals from incorporating.

It is impossible to run a franchise completely from home.

To change ownership in a corporation you simply sell your stock to someone else.

One of the major disadvantages of a sole proprietorship is the:

One advantage of a partnership is that there is a simple process for partners to terminate their business.

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.

A merger involving a software producer and a clothing manufacturer is an example of a:

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.

A conglomerate merger will:

In a partnership,a(n)__________ partner (owner)actively manages the company and has unlimited liability for claims against the firm.

Jenna plans to invest in a cleaning service franchise called "Spare Time".At her first interview with the franchisor's selling agent,she learned that the parent company expects royalties of 5%.These are:

Compared to sole proprietorships,an advantage of partnerships is their ability to obtain more financial resources.

The limited liability company requires a minimum of 10 members.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

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

Bonus A: Using Technology to Manage Information

Bonus B: Managing Risk

Bonus C: Managing Your Personal Finances

Appendix: Working Within the Legal Environment

Filters