Question

1. why is it easier for a partnership to borrow money and to hold good employees than it is for a sole proprietorship to do so?

a. the more limited access to a partners personal funds make the business more careful.
b. the large number of partners makes it more likely that the business will be a success.
c. the larger number of partners means that people are easier to get along with.
d. a partnership has more personal stability and access to more money.

1. what is the major difference between a corporation and other kinds of businesses?

a. a corporation is much larger than other kinds of businesses.
b. a corporation is not responsible for its debts if it fails.
c. a corporation has a separate entity apart from that of the owners and workers.
d. a corporation has officers who are responsible for the business.

1. what are royalties?

a. fees paid to law firms and accountants
b. a percentage of a franchises earnings paid to the parent company
c. fees paid to celebrities for using their names
d. a percentage of profits paid to the government

1. which of the following represents the percentage of all u.s. businesses that are corporations, and the percentage of all goods that those corporations sell?

a. 10 percent of businesses; 50 percent of goods sold
b. 20 percent of businesses; 90 percent of goods sold
c. 50 percent of businesses; 75 percent of goods sold
d. 20 percent of businesses; 50 percent of goods sold

1. what is a fringe benefit?

a. a cash payment for casual work
b. a business other than sales or marketing
c. a payment other than wages or salaries
d. an accounting term meaning profits

1. which of the following is a disadvantage of a sole proprietorship?

a. lack of permanence
c. legal constraints
b. high taxes
d. difficult to start up

1. what are the money and other valuables that belong to a corporation or partnership called?

a. liabilities
c. ownership
b. assets
d. liens

1. what are organizations that are in the business of benefiting society and operate like a business called?

a. trade associations
c. producer cooperatives
b. nonprofit organizations
d. limited partnerships

1. the family - owned italian restaurant in your neighborhood is probably an example of a

a. multinational corporation.
c. consumer cooperative,
b. franchise.
d. general partnership.

1. in a publicly held corporation

a. stockholders rarely trade their stocks.
b. a large number of stockholders can buy and sell stock.
c. stocks are not usually traded at stock exchanges.
d. family members are excluded from holding stock.

Explanation:

1. In a partnership, having more partners means access to more personal funds (stability) and combined financial resources (more money), which helps in borrowing and retaining employees. Sole - proprietorships have only one owner's resources.
2. A corporation is a separate legal entity from its owners (shareholders) and workers. This is a fundamental characteristic that differentiates it from sole - proprietorships and partnerships.
3. Royalties are a percentage of a franchisee's earnings paid to the parent (franchisor) company for the right to use the brand, business model, etc.
4. Approximately 20 percent of U.S. businesses are corporations, but they sell about 90 percent of all goods due to their large - scale operations.
5. Fringe benefits are non - wage/non - salary payments to employees, like health insurance, retirement plans.
6. Sole - proprietorships lack permanence as they are closely tied to the owner. If the owner dies or leaves, the business may dissolve.
7. Assets are the money and valuable resources (property, equipment, etc.) that a corporation or partnership owns.
8. Non - profit organizations operate like businesses (have operations, management) but their main goal is to benefit society (e.g., charities, some hospitals).
9. A family - owned Italian restaurant is likely a general partnership if there are multiple family members as owners (common in family - run businesses without corporate structure).
10. In a publicly - held corporation, a large number of stockholders can buy and sell stock on stock exchanges (liquidity of shares).

Answer:

1. d
2. c
3. b
4. b
5. c
6. a
7. b
8. b
9. d
10. b