Chapter 8

Question 1

Business organization

Answer 1

An establishment formed to carry on commercial enterprise

Question 2

Sole proprietorship

Answer 2

Business owned and managed by a single individual

Question 3

Business license

Answer 3

Authorization to start a business issued by the local government

Question 4

Zoning law

Answer 4

Law in a city or town that designates separate areas for residency and for business

Question 5

Liability

Answer 5

The legally bound obligation to pay debts

Question 6

Fringe benefit

Answer 6

Payment other than wages or salaries

Question 7

Partnership

Answer 7

Business organization owned by two or more

Question 8

General partnership

Answer 8

Share equally in responsibility and liability

Question 9

Limited partnership

Answer 9

Only one partner is requires a general partnership

Question 10

Limited liability partnership (LLP)

Answer 10

All partners are limited partners

Question 11

Articles of partnership

Answer 11

A partnership agreement

Question 12

Uniform partnership act (UPA)

Answer 12

Act ordering common ownership interests, profit and loss sharing, and shared management responsibilities in a partnership

Question 13

Assets

Answer 13

Money and other valuables belonging to an individual or business

Question 14

Corporation

Answer 14

A legal entity owned by individual stockholders

Question 15

Stock

Answer 15

Certificate of ownership in a corporation

Question 16

Closely held corporation

Answer 16

Issues stock to only a few people, often family members

Question 17

Publicly held corporation

Answer 17

Sells stock on the open market

Question 18

Bond

Answer 18

Formal contract to repay borrowed money with interest at fixed intervals

Question 19

Certificate of incorporation

Answer 19

License to form a corporation issued by state government

Question 20

Dividend

Answer 20

Portion of corporate profits paid out to stockholders

Question 21

Horizontal merger

Answer 21

Combination of two or more firms competing in the same market with the same good or service

Question 22

Vertical merger

Answer 22

Combination of two or more firms involved in different stages of producing the same good or service

Question 23

Conglomerate

Answer 23

Business combination merging more than three businesses that make unrelated products

Question 24

Multinational corporation (MNC)

Answer 24

Large corporation that produces and sells its goods and services throughout the world

Question 25

Business franchise

Answer 25

A semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area

Question 26

Royalty

Answer 26

Share of earnings given as payment

Question 27

Cooperative

Answer 27

Business organization owned and operated by a group of individuals for their mutual benefits

Question 28

Consumer cooperative

Answer 28

Retail outlet owned and operated by consumers

Question 29

Service cooperative

Answer 29

Provides a service, rather than a good

Question 30

Producer cooperative

Answer 30

Agricultural marketing cooperative that helps members sell their products

Question 31

Nonprofit organization

Answer 31

Institution that functions much like a business, but does not operate for the purpose of generating profits

Question 32

Professional organization

Answer 32

Nonprofit, works to improve the image, working conditions, and skill level of people in particular occupations

Question 33

Business association

Answer 33

Nonprofit organization that promotes collective business interests for a city, state, or other geographical area

Question 34

Trade association

Answer 34

Nonprofit, that promotes the interests of a particular industry