Topic 5 Lessons 1-3 Quiz

1. Which best describes a sole proprietorship?

• business owned by two partners

• business owned by an individual

• business owned by a corporation

• business owned by the government

As a sole proprietor, offering employees "non-wage compensation" (vacation time, holiday, or sick leave) is hard. How does this lack of resources affect your ability to run a business?

• It makes it difficult for the owner to make a profit.

• It makes it difficult for the owner to promote the business.

• It makes it difficult for the owner to pay competitive wages.

• It makes it difficult for the owner to attract good employees.

1. Why is liability the biggest disadvantage of a sole proprietorship?

• The owner may not be able to complete work on time.

• The owner might be unable to pay his or her employees.

• The owner may have difficulty getting loans from banks.

• The owner could lose personal property if the business fails.

1. Which advantage of a sole proprietorship could also be a disadvantage?

• A sole proprietor can easily start a business.

• A sole proprietor has full control.

• A sole proprietor is the sole receiver of profit.

• A sole proprietor has to follow relatively few regulations.

1. Why would someone be willing to share the economic right to business ownership by forming a partnership?

• to benefit from being connected to a well-known brand name

• to limit liability

• to avoid paying additional income tax

• to enjoy a greater share of profits

TRUE OR FALSE: It is easier to raise money as a sole proprietor than in a partnership.

• TRUE

• FALSE

A firm that is owned by two or more individuals, where profits are split.

• partnership

• sole proprietorship

• corporation

• franchisee

This business franchise is a semi-independent entity that pays fees to a parent company.

• corporation

• entrepreneur

• general partnership

• business franchise

True or False: One of the advantages of a corporation is that it is easy to raise money.

• TRUE

• FALSE

Which of these is considered a corporation?

• Amazon

• Carlos' Pizza Truck

• Walmart

• Burnett's Furniture Mart