Deck 5: Small Business and Forms of Business Ownership

Question 1

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A _____,is a legal organization where assets and liabilities are separate from those of its owners.

Answer 1

C

Question 2

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A(n)_____ owns a corporation due to his or her purchase of stock.

Answer 2

L

Question 3

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A merger of firms in unrelated industries is called a(n)_____.

Answer 3

G

Question 4

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
During a(n)_____,two or more firms combine to form one company.

Question 5

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
Small businesses can buy equipment or operate a business using a _____.

Question 6

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A(n)_____ is independently owned and operated,and is responsible for more than half of the nation's gross domestic product.

Question 7

Provide an example of how innovation drives small business.

Question 8

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
The form of business ownership that is least subject to legal red tape is _____.

Question 9

Explain how small businesses create new industries.

Question 10

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A(n)_____ combines firms operating at different levels in the production and marketing process.

Question 11

Describe how the Internet creates both challenges and advantages for small businesses.

Question 12

Describe how small businesses help create new jobs.

Question 13

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A(n)_____ is a partnership between two or more companies.

Question 14

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A(n)_____ occurs when one firm purchases the property and assumes the obligations of another firm.

Question 15

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
Small businesses can seek financial help and loans from the _____.

Question 16

Describe three primary reasons a small business might fail.

Question 17

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
A(n)_____ joins firms in the same industry that wish to diversify,increase their customer base,cut costs,or offer expanded product lines.

Question 18

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
The governing body of a corporation is called a _____.

Question 19

MATCHING
Complete the following using the terms listed.
a.sole proprietorship
b.small business
c.C corporation
d.merger
e.acquisition
f.horizontal merger
g.conglomerate merger
h.microloan
i.vertical merger
j.joint venture
k.board of directors
l.stockholder
m.preferred stock
n.Small Business Administration (SBA)
Owners of _____ have limited voting rights,but are entitled to the earliest dividends.

Question 20

Describe how to identify a small business from a large one.

Question 21

Discuss two alternatives to private ownership and give an example of each.

Question 22

Describe the steps required when incorporating a business.Regarding incorporation,what might make a state "business-friendly"?

Question 23

Explain why women are drawn to owning their own businesses.

Question 24

What percent of U.S.companies are considered small businesses?

A)50%
B)25%
C)99.7%
D)15%

Question 25

Compare and contrast the three forms of business ownership.

Question 26

Small-business owners want to determine whether their companies meet the standards for small-business designation because

A)they do not have to pay taxes on their profits.
B)government agencies offer benefits designed to help small businesses compete with larger firms.
C)incorporation is easier for them.
D)banks are more likely to grant them loans.

Question 27

Describe the types of loans the Small Business Administration (SBA)offers to small businesses.

Question 28

Which type of business is least likely to be bought by large companies?

A)businesses that sell personalized services
B)businesses with high overhead costs
C)businesses that are located outside of the United States
D)businesses that were founded by college students

Question 29

Although the average farm size has increased in recent years the majority of farmers operate as ________ businesses.

A)government owned
B)Large
C)partnerships
D)Small

Question 30

Compared to large businesses,which of the following statements regarding small businesses is CORRECT?

A)Small businesses are less likely to hire young employees.
B)Small businesses are less likely to develop new products.
C)Small businesses are more likely to be eligible for government loans or for government purchasing programs.
D)Small businesses are more likely to be franchises.

Question 31

Of the following industries,which is most likely to be owned by a small business owner?

A)nursing home
B)paper mill
C)home building company
D)electric utilities company

Question 32

Define the categories of corporations.

Question 33

Explain the how domestic,foreign,and alien corporations are different from one another.

Question 34

Which government agency establishes standards for small businesses?

A)Food and Drug Administration
B)Securities and Exchange Commission
C)Small Business Administration
D)Small Business Investment Company

Question 35

Small businesses that provide ________ have experienced the greatest increase in new jobs.

A)goods
B)services
C)products
D)retailing merchandise

Question 36

Innovation is possible in small business because they ________.

A)employ highly intelligent,motivated people
B)have the funds to turn new ideas into large-scale,profitable ventures
C)work harder
D)provide fertile ground for new ideas

Question 37

Traditionally,small businesses tended to be concentrated in the ________ industry.

A)manufacturing
B)retailing
C)wholesaling
D)importing/exporting

Question 38

Why are small businesses especially important to women and minorities?

Question 39

The majority of all U.S.firms employ:

A)more than 5,000 employees
B)1,000 to 3,000 employees
C)3,000 to 5,000 employees
D)500 or fewer employees

Question 40

Compare mergers and acquisitions.

Question 41

Which of the following is the leading cause of today's small business failures?

A)management shortcomings
B)poor products and/or services
C)no marketing plan
D)excess government regulation

Question 42

Alexander has just opened a bakery & café in a busy New York City neighborhood.He has received an SBA-guaranteed microloan of $13,000.Alexander can use the microloan for all of the following,EXCEPT:

A)to buy a new dough mixer
B)to pay off outstanding business-related credit card bills
C)to pay for a new advertising campaign
D)to pay rent and utility bills for the building

Question 43

The ________ industry represents the greatest percentage of minority-owned businesses.

A)Finance
B)Service
C)Retail
D)transportation

Question 44

All of the following are contributions of small businesses EXCEPT:

A)They provide more job security than large corporations.
B)They fuel local economies.
C)They provide needed services to the larger corporate community.
D)They create a substantial number of new jobs.

Question 45

Owners of small businesses can increase their chances of success if they:

A)become an expert in legal,financial,marketing,and other related business areas.
B)incorporate their business.
C)hire only family members or friends.
D)understand their own limitations.

Question 46

If business owners in a partnership wish to limit liability,they have the option to ________.

A)pledge funds
B)divide into sole proprietorships
C)set up a limited partnership
D)withhold funds

Question 47

A small business fails in the management sense when ________.

A)financial training is lacking
B)marketing training is lacking
C)staffs are overworked
D)overall business training is lacking

Question 48

Which of the following is NOT a reason that women start their own businesses?

A)more flexible hours to accommodate child-care
B)women are guaranteed larger loans from the SBA
C)frustration with the bureaucracies in large companies
D)getting laid off from a corporate job

Question 49

If you are considering starting your own business,a key priority for you should be to:

A)get a loan from your local bank
B)incorporate your business.
C)learn the basics of business.
D)apply for a Small Business Administration loan.

Question 50

Devon and Keith opened a restaurant as a partnership.Two years later,Keith left the restaurant,and Devon discovered that Keith had charged numerous expenses to their account.These expenses resulted in thousands of dollars' worth of debt for the restaurant.What option does Devon have in this situation?

A)He doesn't have to worry because,according to law,everyone is responsible for his/her own debts.
B)Business creditors will pursue Keith alone since his signature authorized payments.
C)Business creditors will expect Devon to pay at least half the debt since he owns 50 percent of the business.
D)Business creditors will expect full payment from Devon.

Question 51

___________ use their own capital supplemented with government loans to invest in small businesses.

A)Franchisors
B)Small Business Investment Companies (SBICs)
C)Joint ventures
D)Microloans

Question 52

When the Small Business Administration (SBA)assists a small business in applying for a major loan,it acts as the lender's ________.

A)credit union
B)savings and loan association
C)guarantor
D)Bank

Question 53

Richard,Sarah,and Trevor form a partnership because it offers the following advantage:

A)limiting liability of partners to the value of their interests in the company
B)unlimited financial liability
C)greater financial resources
D)double taxation

Question 54

Sole proprietorships have all of the following advantages EXCEPT ________.

A)unlimited life
B)ease of formation
C)profits subject only to a single tax
D)ease of liquidation

Question 55

Seven out of ten new businesses survive at least ______ years and about half make it to the _____-year mark.

A)2;5
B)3;5
C)2;10
D)2;3

Question 56

Although ______ are the most common type of business ownership,the greatest revenues come from ______.

A)sole proprietorships,partnerships
B)sole proprietorships,corporations
C)corporations,partnerships
D)partnerships,corporations

Question 57

The Small Business Administration (SBA)provides all of the following EXCEPT:

A)loan guarantees
B)advice from executives
C)access to venture capitalists
D)business incubators

Question 58

Many businesses fail during the early years because of ________.

A)niche marketers
B)inadequate financing
C)unmotivated owners
D)poor planning

Question 59

Haseem owns a small business and needs assistance on a variety of issues.The Small Business Administration (SBA)can help him by providing ________.

A)an accountant
B)a business incubator
C)government procurement
D)an advertising specialist

Question 60

________ newly-launched businesses fail within two years after commencing operations.

A)Less than one in ten
B)About one of every three
C)About half of all
D)Almost all

Question 61

The maximum number of shareholders is limited to ________ for a firm to qualify as an S corporation.

A)25
B)50
C)75
D)100

Question 62

Which of the following statements is true regarding employee-owned corporations?

A)The number of employee-owned corporations is declining in the United States.
B)Employee-owned corporations may not publicly trade their stock.
C)Employees buy shares of stock in the company that employs them.
D)Stock prices in employee-owned corporations typically decrease.

Question 63

Which of the following types of businesses is least likely to be a not-for-profit corporation?

A)a daycare center
B)a public library
C)a religious congregation
D)a pet rescue

Question 64

When a government unit owns and operates an organization,the arrangement is known as ________.

A)private ownership
B)a cooperative
C)public ownership
D)employee ownership

Question 65

The ________ is most likely an example of public ownership.

A)movie theater
B)city sewer system
C)trucking company
D)television company

Question 66

Corporations have all of the following advantages EXCEPT ________.

A)favorable tax treatment
B)limited liability
C)expanded financial capacity
D)unlimited life

Question 67

The stock of Old Germany Brewery is totally owned by the Prechter family.When the family elected to move from a sole proprietorship to a corporation,the greatest concern was ________.

A)there might be family squabbles
B)how to limit liability
C)choosing work assignments
D)double taxation

Question 68

___________ must verify in writing the accuracy of their corporation's financial statements.

A)Board members
B)Stockholders
C)CEOs and CFOs
D)Governmental officials

Question 69

If you are a highly independent individual used to having your own way,the best business format for you is a ________.

A)partnership
B)corporation
C)sole proprietorship
D)limited liability corporation

Question 70

Most states require at least ________ incorporators,or individuals who create the corporation.

A)two
B)five
C)ten
D)three

Question 71

Lucia is a chief financial officer in a large corporation.Her responsibilities include the full financial authority to make appropriations and authorize expenditures.Lucia is likely to be a member of ________ management.

A)Middle
B)advisory
C)supervisory
D)Top

Question 72

Alternatives to private ownership include ________.

A)public ownership and collective ownership
B)employee ownership and foreign corporations
C)foreign corporations and public ownership
D)employee ownership and collective ownership

Question 73

When founding members of Mary Kay Inc.wanted to regain family control of the cosmetics business,they changed the company ownership from publicly held to ________,in order to control and manage corporate activities.

A)limited
B)closed
C)preferred
D)restricted

Question 74

United Airlines' purchase of Continental Airlines combines the resources and capabilities of both firms to create the world's largest airline.The newly formed company is an example of a _____________.

A)vertical merger
B)joint venture
C)horizontal merger
D)conglomerate merger

Question 75

Anita established a corporation in Nebraska,but she recently moved to Colorado where she now conducts her business.What type of corporation does Anita own?

A)alien corporation
B)domestic corporation
C)foreign corporation
D)national corporation

Question 76

All of the following are duties of the board of directors of a corporation EXCEPT ________.

A)guaranteeing the payment of cash dividends every year
B)electing its own officers
C)hiring the corporation's chief executive officer
D)authorizing major transactions of the corporation

Question 77

Ben is the owner of a small mushroom farm in Pennsylvania.Ben would like to join with other growers to create an organization that will promote and distribute mushrooms.The form of ownership that would be most suited for the growers is the ________.

A)joint venture
B)open corporation
C)government-owned collective
D)cooperative

Question 78

The board of directors usually includes some individuals who are not employed by the corporation.These people are referred to as ________.

A)priority directors
B)outside directors
C)stockholders
D)members of top management

Question 79

The board of directors of a corporation is elected by the ________.

A)corporation's employees
B)bondholders and other creditors
C)corporate officers
D)stockholders

Question 80

Isabella owns 100 shares of IBM ________ stock,which means she has voting rights on company decisions at IBM,but only residual claims on the company's assets.

A)preferred
B)principal
C)management
D)common