ITB Chapter 3 And 4 Question Preview (ID: 38872)


Types Of Business Ownership Developing A Business Plan. TEACHERS: click here for quick copy question ID numbers.

Many small and family-owned businesses operate as _______.
a) franchises
b) limited liability companies
c) publicly held corporations
d) closely held corporations

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) closely held corporation
c) publicly held corporation
d) franchise

_______ refers to an application to operate as a corporation.
a) corporate bylaws
b) corporate charter
c) going public
d) articles of incorporation

_______ is a disadvantage of organizing a business as a corporation.
a) double taxation
b) lack of capital
c) limited liability
d) snap decision making

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) sole proprietorship
b) partnership
c) corporation
d) board of directors

An advantage of organizing a business as a partnership is _______.
a) disagreement among partners
b) unlimited liability
c) more skills and knowledge
d) limited life

Limited human resources is a disadvantage of a _______.
a) partnership
b) closely held corporation
c) publicly held corporation
d) sole proprietorship

_______ account for 5 percent of all the businesses in the United States.
a) partnerships
b) sole proprietorships
c) closely held corporations
d) publicly held corporations

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

A _______ is a business partner who does not take an active role in decision making or running the business.
a) general partner
b) limited partner
c) sole proprietor
d) stockholder

A(n) _______ is an economic system in which people can choose what they buy, what they produce and sell, and where they work.
a) free enterprise system
b) inventory
c) business plan
d) market

The amount of money earned over and above the amount spent to keep the business operating is called _______.
a) assets
b) liability
c) budget
d) profit

Effective _______ help companies to maintain sales.
a) marketing plans
b) strategic plans
c) financial plans
d) budgets

The first step in writing a strategic plan is _______.
a) identifying steps to achieve your goals
b) setting goals
c) purchasing assets
d) choosing promotions

The systematic process of recording and reporting the financial position of a business is called _______.
a) a transaction
b) cash flow
c) a budget
d) accounting

A standard set of guidelines used in recording and reporting financial changes is known as _______.
a) generally accepted accounting principles (GAAP)
b) a financial plan
c) a budget
d) accounting

Negative cash flow is a situation that occurs when a business _______.
a) spends more money than it receives
b) receives more money than it spends
c) applies GAAP
d) earns high profits

The merchandise retailers have for sale is called _______.
a) promotions
b) reserve funds
c) inventory
d) assets

A(n) _______ occurs each time a business records a purchase.
a) cash flow
b) transaction
c) negative cash flow
d) inventory

A business's _______ are often used to repair equipment.
a) assets
b) operating costs
c) cash reserves
d) investments

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