Forms of Business Organization

Which of the following is the most common form of business organization?

• corporation

• sole proprietorship

• franchise

• partnership

Which of the following is one of the advantages of a sole proprietorship?

• owner keeps all profits produced by the business

• ease to attract capital

• owner has limited liability

• sole proprietorship has unlimited life

Net income equals...

• total sales before expenses

• dividends paid to investors

• total expenses before sales

• income after expenses

Which of the following defines depreciation?

• noncash expense that businesses can take as a result of general wear of equipment

• a firm's cash flow after all expenses have been deducted

• the amount borrowed when getting a bank loan

• payment made to a bank for the use of money

An organization that operates like a business, but does not seek to gain a profit.

• venture capitalist

• nonprofit organization

• credit union

• conglomerates

An organization that owns four or more businesses that make unrelated products. No one division of the company is responsible for the majority of its sales.

• nonprofit organization

• entrepreneurial

• multinational

• conglomerate

A written document issued by the government giving permission to establish a corporation.

• charter

• common stock

• dividend certificate

• limited life agreement

Which of the following is an advantage of a sole proprietorship?

• almost no requirements to start up

• owner makes all decisions

• owner keeps all profits

• all the above statements are true

In a limited partnership ...

• all partners are equally responsible for the business day to day operations.

• a business where one or more of the partners are not involved in running the business.

• a business organization where the owner's liability is limited to the amount of money invested.

• is a business in which allows other businesses to use its name

One disadvantage of a corporation is...

• the corporation provides limited liability for its owners.

• the corporation can sell stock to raise revenue.

• the corporation is subject to many government regulations.

• the corporation pays limited taxes