Chapter 7

Question 1

1. When choosing an organizational type, control versus responsibility, and risk tolerance are important factors you should consider.

Answer 1

True

All qualities for managing

Question 2

2. Each type of business has its own set of risks and rewards, costs and benefits

Answer 2

True

Not all businesses will have the same goal set in mind

Question 3

In a sole proprietorship, the owner of the business does not enjoy complete control over all aspects of the business.

Answer 3

False

Being a sole proprietorship means to have individual owener ship most enjoy this and find it positive

Question 4

4. Sole proprietorships are the simplest and most common legal structure for a business

Answer 4

True
Sole proprietorship means not involving so many people

Question 5

5. A general partnership assumes profit, liability and management duties are divided equally among partners.

Answer 5

True
General partnership more than one person has partners

Question 6

The disadvantages of partnerships include the partners bring diverse skills and perspectives

Answer 6

False

it would be an advantage to involve people with partnerships and diverse skills

Question 7

Pizza Hut restaurants are examples of a franchise

Answer 7

True

DD
McDonalds
Subway

Question 8

Partnerships are subject to double taxation.

Answer 8

False

C corp are subject to double taxation

Question 9

LLCs and C Corporations are taxed differently.

Answer 9

True

C Corp are subject to double taxation

LLC through the IRS and their own individual taxation

Question 10

When two companies combine to form a new company it is called an acquisition

Answer 10

False

Merger
Acquisition is more than a 50% take over