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1. | After making the decision to start a business, entrepreneurs must do all of the following EXCEPT __________
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| a) do all the work in their businesses themselves.
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| b) learn as much as possible about the businesses they plan to start.
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| c) gather the factors of production.
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| d) be willing to take a risk.
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2. | Every business, regardless of size, involves which four elements?
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| a) shareholders' prospectuses, expenses, advertising, and receipts
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| b) advertising, the Small Business Administration, record keeping, and risk
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| c) expenses, risk, small business incubators, corporate bonds
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| d) expenses, advertising, receipts and record keeping, and risk
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3. | The advantages of sole proprietorships include all of the following EXCEPT __________
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| a) the owner receives all the profits.
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| b) the owner has unlimited liability.
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| c) management decisions can be made quickly.
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| d) the operation of the business is usually less complicated than other types of business.
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4. | Which of the following statements about partnerships and sole proprietorships is TRUE?
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| a) Unlike sole proprietorships, partnerships are protected from unlimited liability.
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| b) Unlike sole proprietorships, partnerships do not have trouble borrowing large amounts of capital.
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| c) Unlike sole proprietorships, management decision making in partnerships is often slow.
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| d) Unlike sole proprietorships, the life of the business in a partnership is not a risk to employees and creditors.
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5. | One advantage to forming a business organization as a corporation is _________
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| a) no federal taxes.
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| b) individual stockholders can influence daily corporation decisions.
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| c) limited liability.
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| d) quick decision making by management.
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6. | Each of the following statements about a typical corporate structure is true EXCEPT __________
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| a) in order to form a corporation, its founders must elect a board of directors.
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| b) the board of directors is responsible for supervising and controlling the corporation.
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| c) a corporation does not have a separate or distinct existence from its stockholders.
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| d) corporations are owned by stockholders.
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7. | An example of a franchise business operation is __________
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| a) Wal-Mart.
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| b) Burger King.
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| c) Sears.
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| d) The Gap.
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