Term
1. Which of the following is NOT one of the three major forms of business ownership?
a. Proprietorship
b. Partnership
c. Franchise
d. Corporation |
|
Definition
|
|
Term
2. Steve opens his own hardware store. He is responsible for all of the daily responsibilities of the store. What kind of business does Steve operate?
a. Proprietorship
b. Partnership
c. Franchise
d. Corporation |
|
Definition
|
|
Term
3. Mike and David own a local car dealership. They share equal responsibility in regards to their business. What kind of business do Mike and David operate?
a. Proprietorship
b. Partnership
c. Franchise
d. Corporation |
|
Definition
|
|
Term
4. Jackie and Sarah own a local flower shop. Due to the poor economy the business currently $7,500 in debt. Who is responsible for the debt incurred by the business?
a. Jackie
b. Sarah
c. Jackie and Sarah
d. None of the Above |
|
Definition
|
|
Term
5. NIKE is a publicly traded company that is recognized as a separate legal entity. What kind of business is NIKE?
a. Proprietorship
b. Partnership
c. Franchise
d. Corporation |
|
Definition
|
|
Term
6. Danielle owns 120 shares of Microsoft stock. Which term explains Danielle’s role in Microsoft?
a. Owners
b. Employee
c. Board Member
d. Shareholder |
|
Definition
|
|
Term
7. Hollister is sued by an animal rights organization for using real fur in the lining of their winter coats. Being a corporation, who is protected against damages if Hollister loses the lawsuit?
a. Shareholders
b. Board Members
c. Owners
d. Employees |
|
Definition
|
|
Term
8. What is the most common form of business ownership in the United States?
a. Proprietorship
b. Partnership
c. Franchise
d. Corporation |
|
Definition
|
|
Term
9. DeQuan and Darrell have decided to open a clothing store. Before opening the store they put in writing all of the responsibilities and terms of their business. What document have DeQuan and Darrell completed by putting the terms of their partnership in writing?
a. Declaration of Partnership
b. Partnership Statement
c. Articles of Incorporation
d. Partnership Agreement |
|
Definition
|
|
Term
10. Before selling stock to the general public, Facebook must put all of their operating procedures and policies in writing. What document is Facebook completing by putting all of their operating procedures and policies in writing for the public to access?
a. Partnership Agreement
b. Articles of Incorporation
c. Mission Statement
d. Declaration of Partnership |
|
Definition
| b. Articles of Incorporation |
|
|
Term
11. Google established written procedures for electing board members in their article of incorporation. What component of the article of incorporation establishes operating procedures?
a. Corporate Bylaws
b. Board of Directors
c. Mission Statement
d. Business Ethics |
|
Definition
|
|
Term
Microsoft offers to buy Facebook for $800 million. Who is responsible for deciding whether or not to accept the multimillion dollar offer from Microsoft?
a. Board of Directors
b. Mission Statement
c. Corporate Bylaws
d. Business Ethics |
|
Definition
|
|
Term
13. Tyree and Gabrielle own a local deli. They would like to renovate their current building, but do not have the money to do so. In order to raise money for the renovations, they agree to take on another partner, Sophia. In return for her investment, Sophia as been guaranteed protection against any financial lose incurred by the business. What kind of specialized partnership has been created between Tyree, Gabrielle, and Sophia?
a. Limited Liability Corporation
b. S-Corporation
c. Joint Venture
d. Limited Liability Partnership |
|
Definition
| d. Limited Liability Partnership |
|
|
Term
14. What specialized form of partnership allows two or more businesses to work together on a specific project for a short amount of time?
a. Joint Venture
b. S-corporation
c. Nonprofit Corporation
d. Limited Liability Partnership |
|
Definition
|
|
Term
15. What specialized form of corporation is favored by many small businesses because it offers limited liability protection for the owners?
a. Joint Venture
b. S-corporation
c. Nonprofit Corporation
d. Limited Liability Partnership |
|
Definition
|
|
Term
16. The American Red Cross operates solely on the donations of the public. The American Red Cross is an example of which specialized form of corporation?
a. Joint Venture
b. S-corporation
c. Nonprofit Corporation
d. Limited Liability Partnership |
|
Definition
|
|
Term
17. A group of local farmers decide to join forces so that they may purchase farming supplies at lower cost. What type of business have the farmers created by joining forces?
a. Franchise
b. Cooperative
c. Limited Liability Company
d. Volunteers |
|
Definition
|
|
Term
18. Starbucks has agreed to let a small business owner in Charlotte, North Carolina open a coffee shop using the products, services, procedures, and names that have been establish by the Starbucks Company. Starbucks is an example of which business?
a. Franchise
b. Cooperative
c. Limited Liability Company
d. Partnership |
|
Definition
|
|
Term
19. Which specialized form of corporation does not require an article of incorporation or corporate bylaws and offers limited liability protection to the owners?
a. Limited Liability Corporation
b. S-corporation
c. Nonprofit Corporation
d. Limited Liability Partnership |
|
Definition
| a. Limited Liability Corporation |
|
|
Term
20. Which form of business ownership gives one person control over all business decisions?
a. Partnership
b. Proprietorship
c. Corporation
d. Franchise |
|
Definition
|
|
Term
21. Which specialized form of corporation combines the advantages of a partnership and a corporation?
a. S-corporation
b. Limited Liability Partnership
c. Nonprofit Corporation
d. Limited Liability Corporation |
|
Definition
| d. Limited Liability Corporation |
|
|
Term
22. Who makes all of the major decisions in a corporation?
a. Managers
b. Owners
c. Board of Directors
d. Investors |
|
Definition
|
|
Term
23. Which of the following statements regarding proprietorships is FALSE?
a. Owner is responsible for all debts
b. Owner has limited resources
c. Owner has no shelter from creditors
d. Owner shares profit |
|
Definition
|
|
Term
24. Which of the following statements is NOT an advantage of a partnership?
a. Partners share resources
b. Partners share responsibility
c. Partners share debt
d. Partners share profit |
|
Definition
|
|
Term
25. Which of the following statements regarding corporations is TRUE?
a. Corporations are owned by shareholders
b. Corporations are easy to form
c. Corporations are managed by investors
d. Corporations have unlimited liability |
|
Definition
| a. Corporations are owned by shareholders |
|
|
Term
26. Which of the following statements is NOT an advantage of a proprietorship?
a. All income is taxed as part of the owner’s personal income
b. All business activity is free of government regulation
c. All debts of the business are the responsibility of the owner
d. All business decisions are made by the owner |
|
Definition
| c. All debts of the business are the responsibility of the owner |
|
|
Term
27. Which of the following statements is an ADVANTAGE of a proprietorship?
a. Owner is responsible for all debt
b. Owner has limited resources
c. Owner retains all profit
d. Owner has no shelter from creditors |
|
Definition
| c. Owner retains all profit |
|
|
Term
28. Which of the following statements is an ADVANTAGE of a partnership?
a. Partners share profit
b. Partners have no shelter from creditors
c. Partners share debt
d. Partnership ends if a partner leaves or dies |
|
Definition
|
|
Term
29. Which of the following statements is NOT an advantage of a corporation?
a. Corporations can be easily expanded by increasing the number of shareholders
b. Corporations share the responsibility of decision making
c. Shareholders can invest without participating in daily operations
d. Shareholders have limited liability |
|
Definition
| b. Corporations share the responsibility of decision making |
|
|
Term
30. Which of the following statements is an ADVANTAGE of a corporation?
a. Corporations are regulated by the government
b. Corporations are protected by limited liability
c. Corporations are require to pay corporate taxes
d. Corporations share the responsibility of decision making |
|
Definition
| b. Corporations are protected by limited liability |
|
|
Term
31. Dominique is an equal partner in a local restaurant business. The public is aware of his role as an investor in the business even though he is not responsible for any of the daily business operations. He is, however, equally liable for any losses that the business incurs according to the partnership agreement. What type of partner is Dominique?
a. Dormant
b. Silent
c. General
d. Secret |
|
Definition
|
|
Term
32. Hector invests $2,000 in his uncle’s car detailing business. The public is unaware of his investment and he is not involved in the daily operating of the business. However, according to the partnership agreement, Hector is equally liable for any losses that the business incurs. What type of partner is Hector?
a. Dormant
b. Silent
c. General
d. Secret |
|
Definition
|
|
Term
33. Shanice is an active partner for a local bakery business; however, the public is unaware of her involvement in the business. According to the partnership agreement, she is equally liable for any losses that the business incurs. What type of partner is Shanice?
a. Dormant
b. Silent
c. General
d. Secret |
|
Definition
|
|
Term
34. Antonio invests $5,000 in a start-up of a local tattoo shop. According to the partnership agreement, he is an equal partner in the business; however, he is not liable for any losses that the business incurs beyond his initial $5,000 investment. Also, he does not participate in any of the business operations. What type of partner is Antonio?
a. Silent
b. Secret
c. Limited
d. Dormant |
|
Definition
|
|
Term
35. Brandon in the sole proprietor of a local art supply store. The business is very successful, so he hires two new employees to keep up with the demands of the store. Which type of liability addresses the hiring and firing of employees?
a. Accident Liability
b. Employment Liability
c. Product Liability
d. Equipment Liability |
|
Definition
|
|
Term
36. Ashley and Amanda own and operate a local gift shop. They have two employees that help them with packaging and deliveries. While on a delivery, one of the employees damages the gift that was ordered. Which type of liability addresses the issue of the damaged gift?
a. Accident Liability
b. Employment Liability
c. Error Liability
d. Equipment Liability |
|
Definition
|
|
Term
37. Thomas is a laborer for a local construction company. While repairing a roof, Thomas is injured on the job. What type of liability addresses the issue of employee injuries?
a. Accident Liability
b. Employment Liability
c. Product Liability
d. Equipment Liability |
|
Definition
|
|
Term
38. Lisa is a limited liability partner in a local business. She invested $10,000 in the business. According to the partnership agreement Lisa is entitled to 30% of the profit that the business earns. If the business goes bankrupt, what is the extent of Lisa’s liability?
a. Lisa is equally responsible for the debt
b. Lisa is not responsible for the debt
c. Lisa is responsible for $10,000
d. Lisa is responsible for the entire debt |
|
Definition
| c. Lisa is responsible for $10,000 |
|
|
Term
39. Terri is the sole proprietor of a local thrift store. One of her customers buys a quilt from the store. The following day the customer returns to the store with a complaint. The quilt that the customer purchased had two fish hooks embedded in the fabric. The customer was injured when the hooks tore into her leg. What type of liability addresses the issue of injures caused by the sale of a damaged good?
a. Employment Liability
b. Accident Liability
c. Equipment Liability
d. Product Liability |
|
Definition
|
|
Term
40. Brad and Jamal are equal partners in a local business. Due to poor economic conditions, the business had to borrow $15,000 from the bank in order to keep the business operating. Who is responsible for repaying the business loan?
a. Brad has to repay the business loan.
b. Jamal has to repay the business loan.
c. Brad and Jamal have to repay the business loan.
d. Brad and Jamal do not have to repay a business loan. |
|
Definition
| c. Brad and Jamal have to repay the business loan. |
|
|
