Corporation & Partnership – Introduction to Business
The key terms of the chapter Introduction to Business include Corporation, Business, Partnership, Sole.
A(n) _____ is a legal entity, created by the state, whose assets and liabilities are separate from its owners.
corporation – correct
strategic group
sole proprietorship
partnership
Which of the following is a disadvantage of corporations?
The life expectancy of a corporation is very short and it lacks continuity.
C. The formation of a corporation can be costly and it faces double taxation. – correct
The owners will have unlimited liability for the debts of a corporation.
The transfer of ownership in a corporation is very difficult.
Which of the following is a disadvantage of sole proprietorships?
lack of business control
lack of continuity – correct
stringent government regulations
sharing of profits with major stock holders
Which of the following is a corporation that provides a service, but is neither owned by the government nor focuses on earning profits?
a C corporation
a nonprofit corporation – correct
an S corporation
a government subsidiary
_____ are legal documents that the state issues to companies based on information the company provides in the articles of incorporation.
Corporation contracts
Articles of partnership
State bonds
Corporate charters – correct
A _____ has been defined as “an association of two or more persons who carry on as co-owners of a business for profit.”
sole proprietorship
cooperative
partnership – correct
quasi-public corporation
A precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals is known as a(n)
business agreement
business plan. – correct
article of partnership
article of incorporation
Which of the following statements best describes bartering?
It is the practice of small businesses trading their own products for the goods and services offered by other businesses. – correct
It is the process in which a small-business owner provides personal property as collateral for a loan.
It is the process in which suppliers allow a business to acquire needed goods and pay for them at a later date.
It is an agreement by which a financial institution promises to lend a business a predetermined sum on demand.
To make profits from a small business, the owner must first provide or obtain _____ to start the business and keep it running smoothly.
products
profits
capital – correct
employees
The act of financing one’s business by using real personal assets is known as
debt financing.
equity financing. – correct
factoring.
franchising.
A _____ is best described as any independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people.
publicly traded company
small business – correct
limited liability company
conglomerate
_____ are typically owned by many individuals and organizations who own shares of the business, called stock.
General partnerships
Corporations – correct
Franchises
Limited partnerships
Obtaining money from venture capitalists to start a new business venture is an example of
factoring.
mortgaging.
debt financing.
equity financing. – correct
A(n) _____ is a form of business ownership that is taxed as though it were a partnership, is popular among entrepreneurs, and represents almost half of all corporate filings.
worker cooperative
C corporation
general partnership
S corporation – correct
Which of the following statements is true of preferred stockholders?
They are the voting owners of a corporation.
They are eligible to vote by proxy.
They have a claim to profits before other stockholders do. – correct
They are generally the decision-makers in the day-to-day running of an organization.
Which of the following is an advantage of a sole proprietorship?
It has limited liability for the debts incurred by the business.
It is easy and inexpensive to form. – correct
It is hard to dissolve.
It is unaffected by the death or withdrawal of its owner.
A ______ involves a complete sharing in the management of a business.
general partnership – correct
limited partnership
joint partnership
joint venture
Which of the following is a disadvantage of sole proprietorships?
lack of business control
lack of continuity – correct
stringent government regulations
sharing of profits with major stock holders
Which of the following is a corporation that provides a service, but is neither owned by the government nor focuses on earning profits?
a C corporation
a nonprofit corporation – correct
an S corporation
a government subsidiary