Introduction to Business

Chapter 6: Business Ownership and Operations

Chapter Practice Review Quizzes

1.
What are the three main forms of business organization?
A)corporations, proprietorships, and stockholders
B)partnerships, corporations, and dividends
C)sole proprietorships, partnerships, and corporations
D)partner proprietorships, corporations, and sole partnerships
2.
Which is true of a sole proprietorship?
A)A sole proprietorship is often difficult and complicated to start up.
B)Revenue for a sole proprietorship is usually higher than that for a corporation.
C)Sole proprietors share decision making with others.
D)Profits from a sole proprietorship are only taxed once.
3.
What does unlimited liability mean to the owner of a business?
A)The owner is responsible for all the company's debts.
B)The owner has limited credit.
C)The corporation is dissolved when the owner dies.
D)The company will fail if the owner does not have all the skills needed to run the business.
4.
Which type of business organization is a partnership most like?
A)limited liability
B)sole proprietorship
C)corporation
D)bank
5.
Which is NOT an advantage of forming a corporation?
A)The company continues even after one owner dies.
B)There is limited liability for the founder
C)Raising capital for startup is easier.
D)Profits are taxed twice: at the corporate level and at the shareholder level.
6.
In order to become a corporation, what must a business have?
A)over 500 employees
B)double taxation
C)a corporate charter
D)stock certificates
7.
Which business structure contains both the benefits of a small business and a corporation?
A)cooperative
B)car sharing
C)nonprofit organization
D)franchise
8.
Which type of business makes a finished product, such as an automobile?
A)industry
B)manufacturer
C)processor
D)producer
9.
How does a product get from a manufacturer to a wholesaler?
A)by a producer
B)by a processor
C)by an intermediary
D)by a retailer
10.
Where do stores get the products that they sell?
A)industries
B)intermediaries
C)wholesalers
D)retailers
11.
Which is true of intermediaries, wholesalers, and retailers?
A)They buy and sell goods.
B)They store goods for long periods of time.
C)They ship goods.
D)They divide up goods into smaller lots.
12.
In which type of business do most Americans work?
A)intermediary
B)retail
C)service
D)wholesale
13.
Which department in a company sets the price of a product?
A)production
B)marketing
C)finance
D)accounting
14.
Which department in a company pays the bills for the business?
A)procurement
B)management
C)finance
D)accounting
15.
Which best describes management's most important job?
A)Improving production efficiency and increasing profits.
B)Monitoring the interdependence of functional areas of the business.
C)Making future decisions by analyzing financial statements.
D)Achieving goals by planning, controlling, and evaluating the effective use of resources.
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