Entrepreneurship and Small Business Management

Chapter 7: Types of Business Ownership

Practice Test

1.
A_______________ is a business that is owned and operated by one person.
A)cooperative
B)sole proprietorship
C)limited partnership
D)creative proprietorship
2.
An owner who has full responsibility for all debts and actions of the business is said to have_____________.
A)liability protection
B)unlimited liability
C)equity
D)limited partnership
3.
To operate as a sole proprietor of a business and use a name other than your own, you must have a______________.
A)certified public accountant (CPA)
B)Small Business Administration (SBA)
C)limited liability company (LLC)
D)Certificate of Doing Business Under an Assumed Name (DBA)
4.
If you are going to hire employees, you need to obtain a/an_________.
A)résumé
B)Employee Identification Number
C)sales tax identification number
D)reference
5.
If you are a vendor or a retailer, you need a/an________________.
A)sales tax identification number
B)DBA
C)income tax return
D)Employee Identification Number
6.
A ___________ is an unincorporated business with two or more owners.
A)venture
B)proprietorship
C)partnership
D)corporation
7.
A/An ____________ partner is a participant in a partnership who has unlimited personal liability.
A)silent
B)general
C)primary
D)unlimited
8.
A ___________ is a business registered by a state that operates apart from its owners.
A)firm
B)proprietorship
C)company
D)corporation
9.
A ___________ is an entity that pays taxes on earnings.
A)limited liability corporation
B)sole proprietorship
C)C-corporation
D)nonprofit corporation
10.
In a C-corporation, the entrepreneurs are protected from being sued by debts and the actions of the _____________.
A)IRS
B)shareholders
C)partners
D)corporation
11.
In the process of forming a corporation, the entrepreneur must file a_________.
A)Certificate of Incorporation
B)sales tax identification number
C)Certificate of Doing Business Under an Assumed Name
D)tax return
12.
_______________ are the owners of the corporation.
A)board of directors
B)founders
C)shareholders
D)stockbrokers
13.
A Subchapter S corporation is taxed like a _____________
A)partnership
B)C-corporation
C)nonprofit corporation
D)small business
14.
A _________________ is a legal entity that makes money for reasons other than the owners' profit.
A)limited corporation
B)nonprofit corporation
C)Subchapter S corporation
D)C-corporation
15.
Many law and medical firms choose to form a______ to protect their partners.
A)limited liability company
B)corporation
C)general partnership
D)Subchapter S corporation
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