Intro to Business Chapters 5 and 6 Test Review

Nonprofit corporations cannot legally pay wages to employees.

• True

• False

To start a partnership, it is a good idea to have a contract that outlines the rights and responsibilities of each partner.

• True

• False

Standard sole proprietorships have unlimited liability.

• True

• False

Banks are more likely to lend money to partnerships than sole proprietorships.

• True

• False

A sole proprietorship is owned by several people.

• True

• False

As your business expands, you can change the form of ownership.

• True

• False

A nonprofit organization must pay taxes.

• True

• False

Which of the following is a business owned by two or more persons who share the risks and rewards?

• partnership

• sole proprietorship

• cooperative manufacturer

• retail producer

  
  

Ocean Spray, an organization owned and operated by cranberry growers, is an example of this type of organization.

• cooperative

  
  

• corporation

• limited partnership

  
  

• nonprofit organization

  
  

A local automobile dealership is considered a manufacturer.

• True

• False