Forms of Business Organization and Types of Business Entity

Question 1

It is a group of people organized for some profitable or charitable
purpose.

Answer 1

Business Entity

Question 2

It is a business entity owned by an individual who
has full control/authority of its business and owns all the assets, personally owes
answers to all liabilities or suffers all losses but enjoys all the profits to the exclusion of
others.

Answer 2

Sole Proprietorship

Question 3

A sole proprietorship must apply for a business name and be registered with the…?

Answer 3

Department of Trade and Industry (DTI)

Question 4

Under the Civil Code of the Philippines, It is treated as juridical
person, having a separate legal personality from that of its members.

Answer 4

Partnership

Question 5

A partnership with more than Peso 3,000 capital must register with the…?

Answer 5

Securities and Exchange

Commission (SEC).

Question 6

It is composed of juridical persons established under the
Corporation Code and regulated by the SEC with a personality separate and distinct
from that of its stockholders.

Answer 6

Corporation

Question 7

Corporations consist of how many incorporators?

Answer 7

five to fifteen

Question 8

It is a corporation with capital stock divided into
shares and authorized to distribute to the holders of such share’s dividends or allotments
of the surplus profits on the basis of the shares held.

Answer 8

Stock Corporation

Question 9

It is a corporation with a
single stockholder, who can only be a natural person (who must be of legal age), trust or
estate.

Answer 9

One Person Corporation (OPC)

Question 10

It is a corporation organized principally
for public purposes such as charitable, educational, cultural, or similar purposes and
does not issue shares of stock to its members.

Answer 10

Non-Stock Corporation

Question 11

It is an organization that uses economic resources to provide goods or
services to customers in exchange for money or other goods and services.

Answer 11

Business Entity

Question 12

A service type of business provides intangible products (products
with no physical form). Service type firms offer professional skills, expertise, advice, and
other similar products.

Answer 12

Service Business

Question 13

This type of business buys products at wholesale price and

sells the same at retail price. They are known as “buy and sell” businesses.

Answer 13

Merchandising Business

Question 14

It buys products with the intention of using them as materials in making a new product.
Thus, there is a transformation of the products purchased.

Answer 14

Manufacturing Business

Question 15

These are written reports prepared by business’ management to present
its financial affairs in a given period

Answer 15

Financial Statements

Question 16

Financial Statement includes..?

Answer 16

Balance Sheet,
Income Statement,
Cash Flows and
Statement of Owner/s’
Equity (for sole proprietorship and partnership) or
Shareholders’ Equity (in case of corporation).
Balance Sheet.

Question 17

It is a financial statement that reports a company’s assets, liabilities and
shareholders’ equity at a specific point in time, and provides a basis for computing rates of
return and evaluating its capital structure.

Answer 17

Balance Sheet

Question 18

The equation that you need to remember when you prepare a balance sheet is…?

Answer 18

Assets = Liabilities + Shareholders Equity (Capital)