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ITB Chapter 3 And 4
Test Description: Types of Business ownership Developing a Business Plan
Instructions: Answer all questions to get your test result.
1) A _______ is a business partner who does not take an active role in decision making or running the business.
A
limited partner
B
stockholder
C
sole proprietor
D
general partner
2) A _______ is a business partner who has decision-making authority, takes an active role in the operation of a business, and has unlimited liability for all losses or debts of the partnership.
A
limited partner
B
general partner
C
business owner
D
sole proprietor
3) Limited human resources is a disadvantage of a _______.
A
partnership
B
closely held corporation
C
sole proprietorship
D
publicly held corporation
4) _______ account for 5 percent of all the businesses in the United States.
A
partnerships
B
closely held corporations
C
publicly held corporations
D
sole proprietorships
5) An advantage of organizing a business as a partnership is _______.
A
disagreement among partners
B
unlimited liability
C
limited life
D
more skills and knowledge
6) A _______ is a business organization that operates as a legal entity that is separate from its owners and is treated by law as if it were an individual person.
A
board of directors
B
sole proprietorship
C
corporation
D
partnership
7) _______ refers to an application to operate as a corporation.
A
corporate bylaws
B
corporate charter
C
going public
D
articles of incorporation
8) _______ is a disadvantage of organizing a business as a corporation.
A
lack of capital
B
snap decision making
C
limited liability
D
double taxation
9) Many small and family-owned businesses operate as _______.
A
limited liability companies
B
publicly held corporations
C
closely held corporations
D
franchises
10) A _______ is a business that operates and pays taxes as a partnership but has limited liability for the owners.
A
limited liability company (LLC)
B
franchise
C
closely held corporation
D
publicly held corporation
11) A(n) _______ is an economic system in which people can choose what they buy, what they produce and sell, and where they work.
A
inventory
B
market
C
free enterprise system
D
business plan
12) The amount of money earned over and above the amount spent to keep the business operating is called _______.
A
budget
B
liability
C
assets
D
profit
13) Effective _______ help companies to maintain sales.
A
strategic plans
B
marketing plans
C
budgets
D
financial plans
14) The first step in writing a strategic plan is _______.
A
purchasing assets
B
identifying steps to achieve your goals
C
setting goals
D
choosing promotions
15) The systematic process of recording and reporting the financial position of a business is called _______.
A
a transaction
B
a budget
C
cash flow
D
accounting
16) A standard set of guidelines used in recording and reporting financial changes is known as _______.
A
a financial plan
B
generally accepted accounting principles (GAAP)
C
accounting
D
a budget
17) Negative cash flow is a situation that occurs when a business _______.
A
receives more money than it spends
B
applies GAAP
C
spends more money than it receives
D
earns high profits
18) The merchandise retailers have for sale is called _______.
A
promotions
B
inventory
C
assets
D
reserve funds
19) A(n) _______ occurs each time a business records a purchase.
A
negative cash flow
B
transaction
C
cash flow
D
inventory
20) A business's _______ are often used to repair equipment.
A
investments
B
cash reserves
C
assets
D
operating costs
*select an answer for all questions
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