Sole Proprietorship
Partnership
Corporation
Growth through Reinvestment
Growth through Mergers
100
What is a sole proprietorship?
A business owned and run by one person
100
What is a partnership?
A business that's jointly owned by two or more persons
100
What is a corporation?
A form of business organization recognized by the law as a separate legal entity with all the rights of an indivisual
100
What is an income statement?
A report showing a firms sales, expenses, net income, and cash flow for a certain period
100
What is a merger?
A combination of two or more businesses to form a single firm
200
Limited or unlimited liability
Unlimited
200
What are the two different types of partnerships?
General partnership and limited partnership
200
Limited or unlimited liability?
Limited
200
What are income statements used for?
To show how a business can use some of the revenue it receives from sales to grow through reinvestment
200
What are the two types of mergers?
Horizontal merger and vertical merger
300
Why is a proprietorship the easiest form of business to start?
There are no requirements except occasional business licenses and fees
300
What are the Articles of Partnership?
Formal legal papers usually drawn up to specify arrangements between partners, these are not always required
300
What government document gives you permission to create a corporation?
A charter
300
Why is depreciation called a non-cash charge?
The money stays in the firm rather than being paid to someone else
300
What is a multinational?
A corporation producing and selling without regard to national boundaries and whose business activities are located in several different countries
400
Whose approval do you need when making a decision?
No ones
400
Where must partnerships submit special schedules detailing heir profits?
The International Revenue Service
400
What is a dividend?
A check that transfers a portion of the company's profits to stock holders
400
What is cash flow?
The total amount of funds a business generates from operations
400
What is a conglomerate?
A firm with four or more businesses making unrelated products, with no single business responsible for a majority of its sales
500
Why don't proprietorship's have to pay separate business income taxes?
They aren't recognized as a separate legal entity
500
Whats is the main disadvantage of a general partnership?
Each partner is fully responsible for the acts of all other partners
500
What is double taxation?
Taxation of dividends of both as corporate profit and as personal income tax
500
If investors want to know about the financial health of a firm, what is one of the first things they look at?
Positive cash flow
500
What are the reasons for merging?
To grow faster, become more efficient, to acquire or deliver a better product, to eliminate a rival, or to change its image
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