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intro to business > Chapter 5 & 6 > Flashcards

Chapter 5 & 6 Flashcards

1
Q

a business that is owned and usually managed, by one person

A

sole proprietor

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2
Q

a legal form of business with two or more owners

A

partnership

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3
Q

a legal entity with authority to act and have liability apart from its owners

A

corporation

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4
Q

The responsibility of business owners for all of the debts of the business

A

unlimited liability

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5
Q

a partnership in which all owners share in operating the business and in assuming liability for the business’s debts

A

General partnership

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6
Q

A partnership with one or more general partners and one or more limited partners

A

Limited partnership

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7
Q

An owner (partner) who has unlimited liability and is active in managing the firm

A

General partner

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8
Q

An owner who invests money in the business but dies not have any management responsibility or liability for losses beyond the investment

A

Limited partner

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9
Q

The responsibility of a business’s owners for losses only up to the amount they invest; limited partners and shareholders (stockholders) have limited liability

A

Limited liability

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10
Q

A partnership that looks much like a corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax

A

Master Limited Partnership (MLP)

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11
Q

A partnership that limits partners’ risk of losing their personal assets to only their owns acts and omissions and to the acts and omissions of people under their supervision

A

Limited liability partnership (LLP)

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12
Q

a state-chartered legal entity with authority to act and have liability to act and have liability separate from its owners

A

conventional (C) corporation

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13
Q

a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships

A

S corporation

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14
Q

a company similar to an S corporation but without the special eligibility requirements

A

limited liability company (LLC)

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15
Q

the result of two firms forming one company

A

merger

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16
Q

on company’s purchase of the property and obligations of another company

A

acquisition

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17
Q

the joining of tow companies involved in different stages of related businesses

A

vertical merger

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18
Q

the joining of two firms in the same industry

A

horizontal merger

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19
Q

the joining of firms in completely unrelated industries

A

conglomerate merger

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20
Q

an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing

A

leveraged buyout (LBO)

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21
Q

an arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in given territory

A

franchise agreement

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22
Q

a company the develops a product concept and sells others rights to make and sell the products

A

franchisor

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23
Q

the right to use a specific business’s name and sell its products or services in given territory

A

franchise

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24
Q

a person who buys a franchise

A

franchisee

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25
Q

a business owned and controlled by the people who use it - producers, consumers, or workers with similar needs who pool their resources for mutual gain

A

cooperative

26
Q

accepting the risk of starting and running a business

A

entrepreneurship

27
Q

a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product

A

entrepreneurial team

28
Q

entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle

A

micropreneurs

29
Q

an online marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website

A

affiliate marketing

30
Q

creative people who work as entrepreneurs within corporations

A

intrapreneurs

31
Q

specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support

A

enterprise zones

32
Q

centers that offer new businesses low-cost offices with basic business services

A

incubators

33
Q

a business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts

A

small business

34
Q

a detailed written statement that describes written statement that describes the nature of the business, the target market, the advantaged the business will have in relation to competition, and the resources and qualifications of the owner(s)

A

business plan

35
Q

individuals or companies that invest in new businesses in exchange for partial ownership of those businesses

A

venture capitalists

36
Q

a U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans

A

Small Business Administration (SBA)

37
Q

a program through which privates investment companies licensed by the Small Business Administration lend money to small businesses

A

Small Business Investment Company (SBIC) Program

38
Q

people with unsatisfied wants and needs who have both the resources and the willingness to buy

A

market

39
Q

an SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost (except for expenses)

A

Service Corps of Retired Executives (SCORE)

40
Q

a business plan most likely ____

A. will get audited by the IRS
B. guarantee success of a small business
C. help the owner think carefully about all aspects of the business idea
D. create an environment in which the owner is solely responsible for profits

A

C. help the owner think carefully about all aspects of the business idea

41
Q

a franchise may be organized as a ____

A. sole proprietorship
B. partnership
C. corporation
D. b and c
E. all of the above
A

E. all of the above

42
Q

a non profit organization

A. seeks to make only a little profit
B. seeks no personal profit for its owners
C. seeks to make 20% profit of income
D. seeks to donate all its money

A

B. seeks no personal profit for its owners

43
Q

corporations sell these to investors to raise financial capital (money)

A. treasury bills
B. business strategies
C. stocks
D. federal paper

A

C. stocks

44
Q

In the US, entrepreneurs have traditionally started as..

A. a small firm that later became a large corporation
B. a large firm that later became a small corporation
C. haven’t really played an important role in the economy
D. a rich subsideairy of the government

A

A. a small firm that later became a large corporation

45
Q

members of cooperatives (not corporations) usually work for and help manage their cooperative

A. true
B. false

A

A. true

46
Q

___% of new jobs are created by small businesses

A. 70%
B. 30%
C. 45%
D. 60%

A

D. 60%

47
Q

Sam and Stefon own a football business which they operate as co-owners. Both take an active duty in management, and each has unlimited liability. Sam and Stefon are in a..

A. limited partnership
B. master partnership
C. corporation
D. general partnership

A

D. general partnership

48
Q

small firms can usually offer ___ compared to larger firms

A. nothing, bigger is always better
B. lower prices
C more personal customer service
D. a greater amount of resources

A

C. more personal customer service

49
Q

stockholders have ____ liability

A. unlimited
B. limited
C. shared
D. redundant

A

B. limited

50
Q

the NFL purchases Pepsi co. What type of merger is this?

A. horizontal
B. conglomerate
C. vertical
D. joint venture

A

C. vertical

51
Q

Unlimited liability falls on what business structure?

A. sole proprietorship
B. corporation
C. general partnership
D. a and b
E. a and c
F. b and c
A

e. a and c

52
Q

what are two important factors when choosing a form of business?

A. number of employees and size
B. taxes and liability
C. liability and size
D. how good the employees are and taxes

A

B. taxes and liability

53
Q

what is a disadvantage of incorporating?

A. unlimited liability
B. ease of ownership
C. double taxation
D. perpetual life

A

C. double taxation

54
Q

when a corporations stocks is not sold to the public, it is said to be

A. general
B. limited
C. closed
D. a sole proprietoship

A

C. closed

55
Q

when buying a franchise, the owner (you) don’t have to work very hard

A. true
B. false

A

B. false

56
Q

which of the following about franchises is true?

A. franchises can not be scammed
B. franchises have extremely small start up
C. the franchisee can run the franchise however they want
D. before you purchase a franchise, you should evaluate it

A

D. before you purchase a franchise, you should evaluate it

57
Q

which of the following is a characteristic of entrepreneurs?

A. the accept 0 risk
B. they look at problems and see opportunities
C. they do not believe in their own ideas

A

B. they look at problems and see opportunities

58
Q

which of the following statements are true about Sole Proprietors?

A. it is easy to start and end
B. it carries the least liability of any ownership
C. profits are taxed at the owners personal tax rate
D. time commitment is lax and easily managed

A

A. it is easy to start and easy to end

59
Q

who is the owner in a franchise agreement?

A. franchisee
B. franchisor
C. stockholders
D. CEO

A

A. franchisee

60
Q

you can eliminate risk by preparing a detailed business plan?

A. true
B. false

A

B. false

intro to business (5 decks)

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