Question

1. individuals who invest in a corporation by buying stock are:

a. subsidiaries b. conglomerates c. cooperatives d. proprietors e. stockholders

1. a business that is owned by the people who use its services is a:

a. nonprofit organization b. partnership c. cooperative d. corporation

1. a business that is owned and controlled by one person is a:

a. cooperative b. partnership c. sole proprietorship d. corporation

1. business organization that is treated by law as if it were an individual person (can sue and be sued) is a:

a. cooperative b. partnership c. sole proprietorship d. corporation

1. business that is owned and controlled by two or more people is a:

a. cooperative b. partnership c. sole proprietorship d. corporation

1. certificates of ownerships in a corporation are called:

a. bonds b. dividends c. stocks d. interest e. liability

1. the business organization that accounts for the most total sales in the nation is the:

a. sole proprietorship b. partnership c. corporation

1. the most common form of business organization is the:

a. sole proprietorship b. partnership c. corporation

1. which of the following applies to the corporation but not to other business organizations?

a. limited liability b. limited life c. lower organizing costs d. ease of organizing

1. which of the following groups own the corporation?

a. bondholders b. executive officers c. board of directors d. stockholders

Explanation:

1. Question 1:

• Analysis:
• A subsidiary is a company controlled by another company.
• A conglomerate is a large corporation made up of different businesses.
• A cooperative is owned by its users.
• A proprietor is the owner of a sole - proprietorship.
• Stockholders are individuals who invest in a corporation by buying stock.

1. Question 2:

• Analysis:
• A nonprofit organization is not focused on profit and is not owned by its users in the same way.
• A partnership is owned by partners.
• A corporation is owned by stockholders.
• A cooperative is owned by the people who use its services.

1. Question 3:

• Analysis:
• A cooperative is owned by its users.
• A partnership is owned by two or more people.
• A sole - proprietorship is owned and controlled by one person.
• A corporation is owned by stockholders.

1. Question 4:

• Analysis:
• A cooperative, partnership, and sole - proprietorship do not have the same legal “personhood” as a corporation. A corporation is treated by law as if it were an individual person (can sue and be sued).

1. Question 5:

• Analysis:
• A cooperative is owned by its users.
• A partnership is owned and controlled by two or more people.
• A sole - proprietorship is owned by one person.
• A corporation is owned by stockholders.

1. Question 6:

• Analysis:
• Bonds are debt instruments.
• Dividends are payments to stockholders.
• Stocks are certificates of ownership in a corporation.
• Interest is a payment for borrowing money.
• Liability is a legal obligation.

1. Question 7:

• Analysis:
• Sole - proprietorships and partnerships generally have smaller sales volumes compared to corporations. Corporations account for the most total sales in the nation.

1. Question 8:

• Analysis:
• Sole - proprietorships are the most common form of business organization due to their ease of formation and simplicity.

1. Question 10:

• Analysis:
• Limited liability (where owners' personal assets are protected) is a feature of corporations. Sole - proprietorships and partnerships have unlimited liability. Limited life is not a unique feature of corporations (some partnerships can also have limited life). Lower organizing costs and ease of organizing are not features of corporations (corporations are more complex to organize).

1. Question 11:

• Analysis:
• Bondholders are creditors.
• Executive officers manage the corporation.
• The board of directors oversees management.
• Stockholders own the corporation.

Answer:

1. e. stockholders
2. c. cooperative
3. c. sole proprietorship
4. d. corporation
5. b. partnership
6. c. stocks
7. c. corporation
8. a. sole proprietorship
9. a. limited liability
10. d. stockholders