Sole Proprietorship – Introduction to Business
The key terms of this chapter Introduction to Business include, Sole, Proprietorships, Company, Corporation, Partnership, Business.
Which of the following forms of business ownership is the easiest to establish?
corporation
joint ventures
sole proprietorship – correct
partnership
In sole proprietorships, owners
cannot easily dissolve the business.
have to share their profits.
have access to limited sources of funds. – correct
do not have to pay any income tax.
Which of the following statements is true of taxation in partnerships?
They are taxed based on the number of shareholders.
They pay taxes at the income tax rate for individuals. – correct
They are exempted from tax.
They pay taxes before distributing profits.
_____ are profits of a corporation that are distributed in the form of cash payments to stockholders.
Retained earnings
Dividends – correct
A corporation doing business in the state in which it is chartered is known as a(n)
horizontal corporation
alien corporation
domestic corporation – correct
quasi corporation
Sole proprietorships are typically small businesses that
focus on providing a service rather than earning a profit.
employ fewer than 50 people. – correct
are formed by two or more partners.
are managed by incorporators.
Which of the following forms of business ownership provides limited liability but is taxed like a partnership?
a sole proprietorship
a general partnership
a C corporation
a limited liability company – correct
A ______ has at least one general partner, who assumes unlimited liability, and at least one limited partner, whose liability is limited to his or her investment in the business.
sole proprietorship
C corporation
general partnership
limited partnership – correct
_____ is a volunteer agency funded by the Small Business Administration to provide advice for owners of small firms.
Local Chambers of Commerce
Small Business Development Centers
Service Corps of Retired Executives – correct
Business Executive Council
Which of the following is the best definition of a merger?
when a company splits into two separate companies
when one company purchases another company by buying most of its stock
when a group of investors borrows money from banks and other institutions to acquire a company
when two companies combine to form a new company – correct
All of the following are advantages of franchising EXCEPT
more freedom in purchasing goods. – correct
national and local advertising programs.
brand-name appeal.
centralized buying power.
Persons or organizations that agree to provide some funds for a new business in exchange for ownership interest or stock are called
intrapreneurs.
category captains.
venture capitalists. – correct
franchisers.
In the process of starting a business, the step that immediately follows the development of a business plan involves
organizing resources like labor and supplies.
developing some general business ideas.
deciding an appropriate legal form of business ownership. – correct
promoting the business to the customers.
Which of the following is one of the commonly reported disadvantages of franchising?
lack of management training and assistance
restrictions on purchasing – correct
lack of financial assistance
low rate of success
Limited partners do not participate in the management of the business.
True – correct
False
Which of the following forms of business ownership is the easiest to establish?
corporation
joint ventures
sole proprietorship – correct
partnership
In sole proprietorships, owners
cannot easily dissolve the business.
have to share their profits.
have access to limited sources of funds. – correct
do not have to pay any income tax.
Which of the following statements is true of taxation in partnerships?
They are taxed based on the number of shareholders.
They pay taxes at the income tax rate for individuals. – correct
They are exempted from tax.
They pay taxes before distributing profits.