Ch 6 A - Bus Formations
Ch 6 B - Bus Formations
Ch 7 A - Entrepreneurship
Ch 7 B - Entrepreneurship
Take a Shot
100
157. A(n) _____ occurs when one firm buys another firm. a) conglomeration b) joint venture c) merger d) acquisition
What is d) acquisition
100
95. Historically, the three basic forms of business ownership in the United States have been the: a) sole proprietorship, partnership, and corporation. b) full partnership, nominal partnership, and silent partnership. c) joint venture, cooperative, and holding company. d) monopoly, duopoly, and oligopoly.
What is a) sole proprietorship, partnership, and corporation.
100
120. Consumer Reports found 68% of an entrepreneur’s start-up financing comes from a) the SBA. b) bank loans. c) personal resources. d) peer-to-peer lending.
What is c) personal resources.
100
151. Burger King, McDonald’s, Wendy’s, and Hardee’s are examples of a) business franchising. b) limited liability companies. c) small businesses. d) health issues.
What is a) business franchising.
100
152. The _____ is the federal government agency dedicated to maintaining and strengthening the national economy by aiding, counseling, assisting, and protecting the interests of small business. a) Small Business Administration b) Federal Trade Commission c) National Center for Business Development d) Federal Small Enterprise Resource Center
What is a) Small Business Administration
200
99. Good friends, Bernie Samples and Susan Randle each studied accounting in college. Recently they decided to work together as co-owners of a small accounting firm. This is an example of a a) sole proprietorship. b) partnership. c) limited liability corporation. d) corporation.
What is b) partnership.
200
103. The majority of businesses today are formed as a) sole proprietorships. b) corporations. c) limited liability partnerships. d) partnerships.
What is a) sole proprietorships.
200
96. In 2010, the overall U.S. entrepreneurship rates reached their highest level in 15 years. The rate increase is partially driven by a) lower interest rates for loans associated with new businesses. b) unemployed workers looking to stay afloat as they seek new jobs. c) teenagers interested in launching their own business one day. d) the unethical behavior by large corporations.
What is b) unemployed workers looking to stay afloat as they seek new jobs.
200
95. Jacob currently works as a manager at a major corporation but has been thinking about quitting to start his own business. Which of the following reasons would most likely explain Jacob’s interest in making this major career change? a) He wants a job with fewer responsibilities. b) He wants more benefits and a steadier income. c) He doesn’t like the risk associated with working in the corporate environment. d) He wants to have more independence and flexibility than his corporate position allows.
What is d) He wants to have more independence and flexibility than his corporate position allows.
200
178. The party in a franchise relationship that pays for the right to use resources supplied by another business entity is known as the a) general corporation. b) limited partner. c) franchisor. d) franchisee.
What is d) franchisee.
300
105. Which of the following is NOT an accurate statement about a sole proprietorship? a) A sole proprietorship is easy and inexpensive to form. b) Legally, the business is considered separate and distinct from its owner. c) Most sole proprietorships are small businesses. d) Sole proprietorships are the most common form of business ownership.
What is b) Legally, the business is considered separate and distinct from its owner.
300
115. Justin Rolando decided to operate his own web design firm and is leaning toward organizing it as a sole proprietorship. One factor Justin should realize is that by choosing this form of business he would be a) creating a business that was legally separate and distinct from himself. b) incurring the problem of double taxation. c) exposing himself to unlimited personal liability for the company’s debts. d) required to fill out special forms and pay proprietorship fees to get the company legally established.
What is c) exposing himself to unlimited personal liability for the company’s debts.
300
114. Which of the following individuals is least likely to become an entrepreneur? a) A person with vision and a high-energy level. b) A person who sees the world in shades of gray and seeks to find ways to use uncertainty to his or her advantage. c) A confident person with an internal locus of control. d) A person who values a stable, predictable income.
What is d) A person who values a stable, predictable income.
300
125. Small business start-ups are likely to find that getting commercial loans is a) hard to do, because commercial lenders are reluctant to make loans to firms that don’t have an established record of successful performance. b) one of the easiest and most flexible sources of financing, because local bankers are usually eager to establish relationships with new companies. c) is fairly easy, but usually entails much higher financing costs than other sources. d) the best way to obtain 100 percent of the financing they need, but only if they give the lender an ownership stake in the company.
What is a) hard to do, because commercial lenders are reluctant to make loans to firms that don’t have an established record of successful performance.
300
135. In most states, the document that owners must file in order to form a corporation is referred to as the a) articles of incorporation. b) prospectus. c) registration statement. d) election of incorporation certificate.
What is a) articles of incorporation.
400
121. A well-written partnership agreement for a general partnership can help the partners deal with all of the following issues EXCEPT how to a) share the profits. b) handle disagreements among partners. c) handle the withdrawal of a partner. d) avoid unlimited liability.
What is d) avoid unlimited liability.
400
110. Susan Boyle is the owner of a piano tuning business. As a sole proprietor, any profit she earns is a) taxed twice, once as a business and then taxed again as Susan Boyle’s income. b) treated as personal income of Susan Boyle. c) tax free. d) taxed only when she withdraws the money from a bank.
What is b) treated as personal income of Susan Boyle.
400
94. Which choice best describes some key reasons for starting up your own business? a) Some people just need a good challenge. As an entrepreneur they will find it; along with the independence to meet it however they see fit. b) Being your own boss provides security and is statistically proven in a recent study conducted at Harvard. c) While starting up your own business may actually crowd the schedule a little bit more, this lack of flexibility up front is worth it in the end, for some. d) Most small businesses are taken public in the first five years, netting their entrepreneurial founders huge profits. Just look at Google, Apple, Microsoft, and others.
What is a) Some people just need a good challenge. As an entrepreneur they will find it; along with the independence to meet it however they see fit.
400
117. Robin is an entrepreneur. As such, she is likely to a) be very superstitious. b) view uncertainty as something that can be turned to her advantage. c) have a hard time coping with failure. d) look objectively at her own abilities and shortcomings.
What is b) view uncertainty as something that can be turned to her advantage.
400
154. A key difference between S Corporations and C Corporations is that a) the owners of C corporations have limited liability while the owners of S corporations have unlimited liability. b) S corporations may have no more than 100 shareholders who must all be citizens or permanent residents of the United States, while C corporations do not have these restrictions on ownership. c) C corporations seek profits while S corporations operate as not-for-profit organizations. d) C corporations have stockholders who have the right to vote in stockholders’ meetings while S corporations have members with no voting rights.
What is b) S corporations may have no more than 100 shareholders who must all be citizens or permanent residents of the United States, while C corporations do not have these restrictions on ownership.
500
145. Benny’s Bumpers is incorporated in Ohio but also conducts business in Florida. Benny’s Bumpers is a _____ in Ohio but is a _____ in Florida. a) C corporation; S corporation b) global; multinational c) primary corporation; secondary corporation d) domestic corporation; foreign corporation
What is d) domestic corporation; foreign corporation
500
166. To increase production capacity and provide consumers with market stability, Exxon and Mobil created ExxonMobil. This would be an example of a _____ merger. a) conglomerate b) horizontal c) vertical d) limited liability
What is b) horizontal
500
109. Emily is a successful entrepreneur. As such, she is likely to a) be very laid back in her approach to running a business. b) believe that most of her success is due to luck and the hard work of others. c) have very little tolerance for uncertainty. d) have a great deal of faith in her business ideas, even when others express doubts.
What is d) have a great deal of faith in her business ideas, even when others express doubts.
500
141. Overhead costs for small businesses a) tend to be much higher than they are for large businesses when expressed as a percentage of total expenses, which is one of the reasons for the high failure rate of small businesses. b) are about the same as they are for big companies when measured as a percentage of total expenses. c) are often lower than they are for big companies, giving small businesses a competitive opportunity. d) primarily arise because small businesses must hire so many outside consultants.
What is c) are often lower than they are for big companies, giving small businesses a competitive opportunity.
500
133. A venture capitalist firm is most likely to be interested in investing in a a) big, well-established corporation that has fallen on hard times. b) large, successful corporation that has several divisions that can be spun off to earn a quick profit. c) small new company with the potential for rapid growth. d) small new company in a mature sector of the economy with the potential for slow but steady long-term growth.
What is c) small new company with the potential for rapid growth.
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