Accounting Fundamentals Quiz

What is the primary reason for putting up a business?

• To buy and sell goods

• To earn a profit

• To provide services

• To employ people

Which legal form of business ownership is managed by one person?

• Corporation

• Sole Proprietorship

• Partnership

• Limited Liability Company

What is the advantage of a sole proprietorship in terms of capital?

• Needs a large amount of capital

• Needs only a small amount of capital

• No capital required

• Capital is not important

What is the disadvantage of a sole proprietorship in terms of expansion?

• Easy to expand

• Difficult to expand because of low capital

• No need to expand

• Expansion is not allowed

According to the Philippine Civil Code, how many persons are required to form a partnership?

• At least 4 persons

• At least 2 persons

• At least 5 persons

• At least 3 persons

What is the main advantage of a partnership in terms of management?

• No management required

• Difficult to manage

• Management is not important

• Ease in managing the business because two or more owners are involved

What is the main disadvantage of a partnership in terms of life span?

• No life span

• No disadvantage in life span

• No life required

• Indefinite life

What is the main advantage of a corporation in terms of management?

• Managed by a single person

• Managed by a Board of Directors elected by the shareholders

• Management is not important

• No management required

What is the main disadvantage of a corporation in terms of control?

• Shareholders have no control

• Shareholders have significant control

• Shareholders have no influence

• Shareholders have significant influence

Which type of business provides services for a fee to clients or customers?

• Consulting

• Merchandising

• Manufacturing

• Service