Partnership Business – Introduction to Business

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Corporation & Partnership – Introduction to Business

The key terms of the chapter Introduction to Business include Partnership business, Corporation, stockholder.


An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization is known as a(n)  

S corporation.

cooperative. – correct

multinational firm.

general partnership


Which type of stockholders usually has the right to vote and elect the board of directors? 

a capital stockholder

a preferred stockholder

a proxy stockholder

a common stockholder – correct


A _____ is a partnership established for a specific project or for a limited time. 

conglomerate

C corporation

joint venture – correct

cooperative


The income earned in sole proprietorships is 

taxed as personal income. – correct

taxed as business income.

exempted for tax.

taxed twice.


The assets and liabilities of a corporation are separate from its owners.

True – correct

False


Banks and other financial institutions can grant a small business a _____, which is an agreement by which a financial institution promises to lend a business a predetermined sum on demand. 

trade credit

trust fund

mutual fund

line of credit – correct


Entrepreneurship is the process of creating and managing a business to achieve desired objectives.

True – correct

False


The legal documents that identify the basic agreements between partners are called 

articles of incorporation.

articles of partnership. – correctc

partnership charters.

partnership bonds.


Which of the following is an advantage of a partnership? 

unlimited liability

few regulatory controls – correct

lack of business responsibility

unrestricted access to funds


Which of the following is a disadvantage of a partnership? 

limited liability faced by the partners

stringent government regulations

difficulty of forming the business

difficulty of selling the partnership interest – correct


_____ is best described as the lack of funds to operate a business normally. 

Debt financing

Undercapitalization – correct

Trade credit

Trade deficit


A license to sell another’s products or to use another’s name in business, or both, is called a  

franchise. – correct

mortgage.

collusion.

collateral.


Which form of business ownership is least used in the United States?

sole proprietorships

partnerships – correct

joint ventures

corporations


Which of the following is a source of equity financing? 

securing government loans

borrowing money from friends

securing short-term loans from a family member

selling personal assets to raise funds – correct


An S corporation is taxed just like any other corporation. 

True

False – correct


An acquisition occurs when one company purchases another company by buying most of its stock.

True – correct

False


A sole proprietor has limited liability in meeting the debts of his or her business.

True

False – correct


Small businesses may obtain funding from their suppliers in the form of a _____, which means that suppliers allow the business to take possession of the needed goods and services and pay for them at a later date or in installments. 

stock dividend

non-recourse loan

mutual fund

trade credit – correct


An organization composed of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization is known as a(n)  

S corporation.

cooperative. – correct

multinational firm.

general partnership


Which type of stockholders usually has the right to vote and elect the board of directors? 

a capital stockholder

a preferred stockholder

a proxy stockholder

a common stockholder – correct


A _____ is a partnership established for a specific project or for a limited time. 

conglomerate

C corporation

joint venture – correct

cooperative


The income earned in sole proprietorships is 

taxed as personal income. – correct

taxed as business income.

exempted for tax.

taxed twice.


The assets and liabilities of a corporation are separate from its owners.

True – correct

False


Banks and other financial institutions can grant a small business a _____, which is an agreement by which a financial institution promises to lend a business a predetermined sum on demand. 

trade credit

trust fund

mutual fund

line of credit – correct


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