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