True or False
Most employees in the United States work in businesses that employ one to four people.
a.True
b.False
True!
Business activities start with ____________________, which create the products and services used by individuals and other businesses.
a.service businesses.
b.producers.
c.intermediaries.
d.marketers.
Producers use resources to make products needed by individuals and other business
“After receiving a shipment, the warehouse supervisor and warehouse clerk must check the goods against the shipping invoice to verify that all items have been delivered as required. If the items are satisfactory, the supervisor may take delivery by signing and dating the invoice.”
The above is an example of a
a.policy.
b.goal.
c.mission statement.
d.procedure.
A procedure is a description of the way work is to be done.
A precise statement of results a business expects to achieve is a
a.mission statement.
b.goal.
c.policy.
d.procedure.
A goal is a precise statement of results a business needs to accomplish and to determine if the business is successful.
A major advantage of a functional organizational structure is that
a.people work with others who have the same skills.
b.all of the people with similar jobs will be paid the same salary.
c.people working in one function have little interaction with people in other parts of the business.
d.people often become more focused on their specific function than on the success of the whole business.
The advantage of a functional organization is that people work with others who have the same skills.
When a large business opens in an area, other businesses often will locate there to support the larger business.
a.True
b.False
True
Of the MAJOR forms business ownership in the United States, the most difficult to form is a
a.partnership.
b.franchise.
c.corporation.
d.proprietorship.
Having more legal requirements to meet, corporations are more difficult to form than either proprietorships or partnerships.
Which of the following type of business is NOT a producer?
a.pharmacy
b.appliance factory
c.coal mine
d.chicken farm
A pharmacy provides a service.
A(n) ____________________ is a written contract granting permission to operate a business to sell products and services in a set way.
a.license
b.cooperative agreement
c.partnership agreement
d.franchise
A franchise is a written contract with a company that owns a product or service granting permission to operate a business to sell products and services in a set way.
A unique business organized by two or more other businesses to operate for a limited time and for a specific project is called a
a.joint venture.
b.limited liability partnership.
c.limited liability company.
d.nonprofit corporation.
A type of partnership called a joint venture is a unique business organized by two or more other businesses to operate for a limited time and for a specific project.
All businesses make products.
a.True
b.False
False
Proprietorships
a.are owned and controlled by two or more people who have entered into a written agreement.
b.account for the largest percentage of business revenues in the United States.
c.are the easiest form of business to start.
d.protect the liability of the business owners to only the amount of money they have invested directly in the business.
The easiest form of business to start is the proprietorship.
The people who make the major policy and financial decisions for a corporation are called the
a.stockholders.
b.owners.
c.board of directors.
d.partners.
A corporation is managed by a board of directors, which makes the major policy and financial decisions for the business.
A written legal document defining ownership and operating procedures and conditions for a corporation is called the
a.corporate code of ethics.
b.partnership agreement.
c.articles of confederation.
d.articles of incorporation.
The articles of incorporation is a written legal document that defines ownership, operating procedures, and conditions for the business.
Employees at the Trexel Company are frequently confused about their assignments, and many employees are unclear about who exactly they report to. Trexel Company does not seem to provide an adequate
a.mission statement.
b.span of control.
c.unity of command.
d.matrix structure.
Unity of command means there is a clear reporting relationship for all staff of a business.
Only very large businesses can become corporations.
a.True
b.False
False
Corporations are the most popular form of ownership for large businesses, but this is an increasingly popular option for new and small businesses as well.
Every business performs all of the following activities EXCEPT
a.maintaining business records.
b.manufacturing products.
c.raising capital.
d.buying goods and services.
Not all businesses are producers or manufacturers. Some are intermediaries or service businesses.
Which of the following would typically NOT be specified in a partnership agreement?
a.the business name
b.the number of hours per week the business will operate
c.the amount of investment of each partner
d.the level of authority each partner has
A partnership agreement typically identifies the business name, the investments, and other contributions of each partner. It also shows how profits and losses will be divided among the partners, the authority and responsibilities granted to each person, and how the partnership can be dissolved.
About what percentage of U.S. workers are employed by businesses that employ more than 100 workers?
a.less than 3 percent
b.11 percent
c.31 percent
d.56 percent
According to the U.S. Bureau of Labor Statistics the percentage of workers in working in businesses that employ over 100 workers is 2.4 percent.
Sometimes a group of people forms a(n) ____________________ to provide goods and services that they all need. It is owned by members, serves their needs, and is managed in their interest
cooperative
Nonprofit corporations do not have to pay corporate income taxes.
a.True
b.False
True!
Unlike for-profit corporations, nonprofit corporations are free from corporate income taxes.
By some estimates, over the next decade the number of contingent workers in the United States is predicted to
a.remain the same.
b.double.
c.triple.
d.decline.
Some estimates predict the number of contingent workers in the United States will double in 10 years
In a(n) ____________________ corporation, all income is passed through to the owners based on their investment and is taxed on their individual tax returns.
S
Which major category of business is the fastest growing in the U.S. economy?
a.producer
b.manufacturer
c.intermediary
d.service business
Service businesses are the fastest growing part of the economy. More than 71 percent of all U.S. employment is now in service-producing businesses.
Briefly discuss the advantages and disadvantages of proprietorships.
Proprietorships are the easiest form of business to start. There is little government regulation. Proprietors have sole control over all business decisions and receive all profits made by the business. All income is taxed as part of the proprietor’s personal income. However, any debts of the business are the responsibility of the owner. Proprietors can be forced to use personal assets not connected to the business to pay business debts.