Deck 5: Forms of Business Ownership and Organization

Question 1

The BDC was created by an act of Parliament in what year?

A) 1932
B) 1940
C) 1944
D) 1954

Answer 1

C

Question 2

Small businesses are more likely than large ones to hire

A) the youngest workers.
B) the oldest workers.
C) minorities.
D) women

Answer 2

A

Question 3

Which of the following is not a Canadian organization that assists small businesses?

A) CSBFP
B) CABI
C) BDC
D) SBA

Answer 3

D

Question 4

Why do home-based businesses often have lower costs?

A) Owners work more hours because their office is their home.
B) Customers are not willing to pay competitive prices for home-based services.
C) Funds that are not being used to pay rent can be directed into the business.
D) There is an increase in the owner's quality of life.

Question 5

Which section of a business plan addresses the target customer base and how to promote business with that base?

A) the company vision
B) the client blueprint
C) the marketing strategy
D) the mission statement

Question 6

Small businesses account for what percentage of Canada's total value of exports?

A) 12%
B) 28%
C) 41%
D) 67%

Question 7

Small businesses are much more likely to fail than large businesses, especially during economic downturns, because of:

A) management shortcomings.
B) difficulty dealing with government regulations.
C) inadequate financing.
D) all of the above.

Question 8

What percentage of small businesses survive the first five years of operations?

A) 20%
B) 30%
C) 50%
D) 70%

Question 9

The primary purpose for developing a business plan is:

A) to obtain financing for the business.
B) to document the founding history of the business.
C) to outline the qualifications of the new business owner(s).
D) to charter the new business with the province in which it is located.

Question 10

Small firms produce _______ times more patents per employee than larger firms.

A) 5
B) 13
C) 18
D) 22

Question 11

What characterizes a small business?

A) It is independently owned and operated and is not dominant in its market.
B) It operates at a loss for many years until it is a large business.
C) Small businesses grow slowly.
D) Small businesses are sole proprietorships.

Question 12

About __________ of all self-employed people in Canada are women.

A) one quarter
B) one third
C) half
D) two thirds

Question 13

Approximately what percentage of Canadian businesses are considered small businesses?

A) 98%
B) 86%
C) 72%
D) 55%

Question 14

A written document that provides a statement of a company's goals, methods for achieving goals, and standards for measurement is

A) a marketing plan.
B) a business plan.
C) an incorporation document.
D) a financial blueprint.

Question 15

__________ is money invested in a business by another business or a group of individuals in return for an ownership share.

A) Financial assistance
B) A direct loan
C) A business incubator
D) Venture capital

Question 16

Which of the following is least likely to be a small business?

A) A restaurant
B) A construction company
C) A mining company
D) An auto repair shop

Question 17

Small businesses often fail due to:

A) inadequate financing.
B) management shortcomings.
C) difficulty dealing with government regulations.
D) all of the above.

Question 18

Most businesses are considered small if they employ fewer than _____workers.

A) 100
B) 500
C) 5,000
D) 1,000

Question 19

Over the duration of many years, more than _______ of all new jobs are created by small business.

A) 20%
B) 35%
C) 50%
D) 70%

Question 20

An effective business plan should include:

A) the vision of the founder(s) and its mission.
B) description of potential competitors.
C) what makes the company unique.
D) all of the above.

Question 21

Which is the most common form of business ownership?

A) sole proprietorship
B) partnership
C) corporation
D) public ownership

Question 22

Nearly __________of all small- and medium-sized enterprises (SMEs) in Canada have at least one female owner.

A) one quarter
B) one third
C) half
D) two thirds

Question 23

Which of the following is most likely to be a co-operative business operation?

A) a group of neighbouring farm owners
B) a chain of restaurants
C) a mom-and-pop grocery store
D) a nursing home

Question 24

How does a partnership differ from a sole proprietorship?

A) double taxed on income
B) funds are limited
C) more difficult to dissolve
D) all of the above

Question 25

A legal organization with assets and liabilities separate from those of its owner is called:

A) a sole proprietorship.
B) a partnership.
C) a corporation.
D) all of the above.

Question 26

Who owns the corporation?

A) The Board of Directors
B) The CEO
C) The employees
D) The shareholders

Question 27

Which of the following is not an advantage of a corporation?

A) Limited liability for the owners
B) Ease of formation
C) Continuity
D) Expanded financial capacity

Question 28

Owners of common shares:

A) have preferred rights in case of bankruptcy.
B) hire the Chief Executive Officer.
C) have voting rights but only residual claims on the firm's assets.
D) make most of the major decisions.

Question 29

A ___________ sells shares to the general public, which sets up a diversified ownership.

A) closed corporation
B) closely held corporation
C) publicly held corporation
D) private corporation

Question 30

Via Rail Canada is an example of:

A) a partnership.
B) a limited liability corporation.
C) a Crown Corporation.
D) a non-for-profit franchise.

Question 31

Which of the following is a major draw-back to sole proprietorships?

A) the owner's personal financial liability
B) a higher chance of being audited
C) a lack of long-term continuity
D) all of the above

Question 32

Which level of management in a corporation hires the CEO?

A) shareholders
B) board of directors
C) top management
D) middle management

Question 33

Which of the following risks does the franchisor risk in a franchise agreement?

A) loss of money for several years
B) loss of control over business reputation
C) loss of absolute control of operations
D) all of the above

Question 34

Which type of business is most likely to operate as a cooperative business?

A) food service
B) agricultural
C) real estate
D) tax service

Question 35

Cooperatives allow members to:

A) share equipment.
B) share in other efforts such as marketing.
C) benefit from group purchasing discounts.
D) do all of the above.

Question 36

A franchisor:

A) is the small business person who purchases the franchise.
B) incurs no risk in the transaction.
C) provides building plans, site selection help, managerial programs and other services for a fee.
D) guarantees profits to the purchaser.

Question 37

Which province leads the rest of Canada in franchising?

A) Ontario
B) Quebec
C) Alberta
D) British Columbia

Question 38

A(n) _________ combines firms in the same industry that wish to diversify, increase their customer base, cut costs, or offer expanded product lines.

A) acquisition
B) vertical merger
C) conglomerate merger
D) horizontal merger

Question 39

___________ is an organization that provides temporary low-cost, shared facilities to small start-up companies.

A) Small business administration
B) Business incubator
C) Venture capitalist
D) Loan specialist

Question 40

Which of the following is not a benefit to the franchisor in a franchise agreement?

A) A franchisor can handle a larger, more complex business.
B) A franchisor employs fewer direct employees.
C) A franchisor can make better buying deals because of quantity purchases.
D) A franchisor is in control of the daily operations of a much larger business.

Question 41

A merger between two companies in different levels of the production and marketing of a product is called a ___________ merger.

A) joint
B) horizontal
C) industry-dominate
D) vertical

Question 42

Why might a firm acquire another company?

A) Mergers guarantee future profitability.
B) Acquisitions allow a company to enter new markets and improve competitiveness.
C) Acquisitions are always less expensive than creating new products.
D) Governments regulate acquisitions less than they do mergers.

Question 43

A(n) _________ consists of two or more firms combined to form one company.

A) merger
B) acquisition
C) joint venture
D) vertical merger