Introduction to Business and Enterprises

Question 1

It is the human activity whose basic purpose is to satisfy consumer demands by making profit

Answer 1

Enterprise

Question 2

The need for a product or service for which effective demand appear on the market

Answer 2

Consumer Demand

Question 3

It is a long-term economic activity with own or rented assets and labor, for profit.

Answer 3

Business (Enterprise)

Question 4

What are the four features of business as an enterprise?

Answer 4

1) Organizationally separate
2) Creators provide the financial conditions
3) Profit-oriented
4) Risks the investment of the founders and the income of the participants in the business

Question 5

It is the organizational framework of the business enterprise.

Answer 5

Company

Question 6

What are the stages of the firm business life cycle?

Answer 6

entry, growth, consolidation and exit

Question 7

It includes choosing the industry as a career, selecting enterprises, acquiring and organizing the necessary resources and establishing a financial base

Answer 7

Entry

Question 8

What is the entry stage in the firm business life cycle?

Answer 8

It includes choosing the industry as a career, selecting enterprises, acquiring and organizing the necessary resources and establishing a financial base

Question 9

It involves the expansion of the size of the business typically by purchasing or leasing additional assets or increasing the scale of the enterprises.

Answer 9

Growth

Question 10

This stage often uses the debt capital to finance the expansion.

Answer 10

Growth

Question 11

How can you expand the size of your business?

Answer 11

a) Purchasing or leasing additional assets

b) Increasing the scale of the enterprise

Question 12

What is the growth stage in the firm business life cycle?

Answer 12

It involves the expansion of the size of the business typically by purchasing or leasing additional assets or increasing the scale of the enterprises.

Question 13

In the growth stage, it uses ____ to finance the expansion.

Answer 13

Debt Capital

Question 14

Debt reduction becomes a priority and increased efficiency is preferred to increased size.

Answer 14

Consolidation

Question 15

What is the priority of the consolidation stage?

Answer 15

Debt Reduction

Question 16

True or False

There is always a decrease in size in the consolidation stage

Answer 16

False. Early planning and merging of the next generation into the business, however, may allow it to continue in the growth or consolidation stage for some time without showing a decline in size.

Question 17

What is consolidation in the firm business life cycle?

Answer 17

It is the stage where debt reduction becomes a priority and increased efficiency is preferred to increased size.

Question 18

It is the stage wherein the firm operator nears retirement.

Answer 18

Exit

Question 19

In the exit stage, attention turns towards three aspects, Enumerate the three aspects.

Answer 19

a) reducing risk
b) liquidating the business
c) transferring the property to the next generation

Question 20

What is the exit stage in the firm business life cycle?

Answer 20

It is the stage wherein attention turns towards reducing risk, liquidating the business and transferring property to the next generation. It is the time when the firm operator nears retirement.

Question 21

What are the nine groupings of enterprises based on the slides

Answer 21

a) by sectors
b) by form of ownership
c) according to organizational form
d) by field of activity
e) according to the size of the business
f) according to independence
g) based on the nature of activity
h) based on the purpose of activity
i) according to taxation

Question 22

What are the three primary sectors?

Answer 22

primary, secondary and tertiary

Question 23

In this sector belongs the extractive industries and agriculture

Answer 23

Primary Sector

Question 24

In this sector belongs the manufacturing, construction, production equipment manufacturer, consumer goods manufacturer

Answer 24

Secondary Sector

Question 25

In this sector belongs the services and trade

Answer 25

Tertiary Sector

Question 26

What are the five groups according to form of ownership?

Answer 26

a) private b) state-owned c) mixed ownership d) municipally-owned e) other community owned such as social organizations and foundations

Question 27

What are examples of community-owned groups?

Answer 27

social organizations and foundations

Question 28

What are the seven classifications according to organizational form?

Answer 28

a) sole proprietorship b) joint ventures c) operating agreements d) partnerships e) corporation f) limited liability companies g) cooperatives

Question 29

What are the different classification according to field of activity?

Answer 29

a) industrial b) agricultural c) trade d) financial institution e) transport f) other

Question 30

What are the different levels according to size of the business?

Answer 30

micro, small and medium-sized

Question 31

In this company category, there are less than 10 employees.

Answer 31

Micro

Question 32

In this company category, there are less than 50 employees

Answer 32

Small

Question 33

In this company category, there are more than 50 employees but not less than 250 employees

Answer 33

Medium-sized

Question 34

What are the different classification according to independence?

Answer 34

autonomous, partner, linked

Question 35

In this independence classification, my enterprise holds less than 25% in another or another enterprise holds less than 25% of mine.

Answer 35

Autonomous Enterprise

Question 36

In this independence classification, my enterprise holds at least 25% but no more than 50% of another or another enterprise holds at least 25% but no more than 50% of mine

Answer 36

Partner Enterprise

Question 37

In this independence classification, my enterprise holds more than 50% of the shareholders' voting rights in another or another holds more than 50% in mine

Answer 37

Linked Enterprises

Question 38

What are the three classification according to nature of activity?

Answer 38

producer, service provider, mixed

Question 39

What are the two types based on the purpose of the activity?

Answer 39

profit-oriented and non-profit

Question 40

What are the four types of classification according to taxation?

Answer 40

individual enterprises, simplified corporate taxpayers, corporate companies subject to the Corporate Tax Act, non-tax budgetary bodies

Question 41

It is the direct tax imposed by the jurisdiction on the income or capital of corporations

Answer 41

Corporate Tax Act

Question 42

It is subject to personal income tax, self-employed persons and sole proprietorship

Answer 42

Individual Enterprise

Question 43

It has the maximum turnover.

Answer 43

Simplified Corporate Taxpayers

Question 44

What are three common forms of business organization?

Answer 44

sole proprietorship, partnership, corporation

Question 45

The owner owns and manages the business , assumes all the risks and receives profits and losses.

Answer 45

Sole Proprietorship

Question 46

In Hungarian, sole proprietorship is __________

Answer 46

Egyéni vállalkozó

Question 47

It can exist even when all the land, buildings and machinery are leased.

Answer 47

Sole Proprietorship

Question 48

True or False | Sole proprietorship requires that the owner to own any assets

Answer 48

False

Question 49

What are added to the other taxable income earned to determine the individual's total taxable income?

Answer 49

business profits and capital gains

Question 50

What are the advantages of sole propiertorship?

Answer 50

freedom, make quick decisions

Question 51

True or False | All losses and business profits belong to the sole proprietorship

Answer 51

True

Question 52

The sole proprietor relies on his or her _____

Answer 52

judgment

Question 53

True or False | Owners of sole proprietorship are personally liable for any legal difficulties and debts related to the business.

Answer 53

True

Question 54

In sole proprietorship, creditors have the legal right to attach the assets of the business and _____ of the owner to fulfil unpaid financial obligation

Answer 54

personal assets

Question 55

Can creditors use the sole proprietor's personal assets for any unpaid financial obligation?

Answer 55

Yes

Question 56

What are the disadvantages of sole proprietorship?

Answer 56

limited capital, difficulty to compete, management abilities may be insufficient, use of personal assets for financial obligation

Question 57

When can creditors have the right to acquire the personal assets of the sole proprietor?

Answer 57

business failure

Question 58

Why is it difficult to compete in the global market if you are a sole proprietor?

Answer 58

There is a limited amount of capital and probably resources that can keep with the demands of the society.

Question 59

This allows two or more operators to combine their respective abilities and assets to achieve the levels of efficiency and other goals that might be unattainable on their own

Answer 59

Joint Ventures

Question 60

What are the 5 types of joint ventures?

Answer 60

operating agreements, partnerships, corporations, limited liability companies, cooperatives

Question 61

What is the primary advantage of joint ventures over sole proprietorship?

Answer 61

combining capital and management

Question 62

Why is a joint venture more efficient than combining two or more small businesses?

Answer 62

It allows a larger business to be formed

Question 63

Why does a joint venture allow a greater chance to increase the business?

Answer 63

Joint ventures increase the amount of credit available.

Question 64

How can the total supply of management and labor increase in a joint venture?

Answer 64

In a joint venture, you can combine all the capabilities of all the members.

Question 65

How does a joint venture allow specialization?

Answer 65

You can divide the management efforts with one person specializing in one area of the business such as production, investment, marketing or accounting.

Question 66

It is a type of joint venture that allows an association of one or more persons who share the ownership of a business to be conducted for profit.

Answer 66

Partnerships

Question 67

What are the two categories of partnerships?

Answer 67

limited partnerships and general partnerships

Question 68

In this category of partnership, there must be one general partner but can have an unlimited number of limited partners.

Answer 68

Limited Partnership

Question 69

They cannot participate in the management of the business.

Answer 69

Limited Partners

Question 70

Their financial liability for partnership is limited only to the actual investment in the partnership.

Answer 70

Limited Partners

Question 71

What are the three basic characteristics of a partnership?

Answer 71

a) sharing of business profits and losses b) shared control of property with the possibility of shared ownership c) shared management of business

Question 72

What are the six business arrangement of a partnership?

Answer 72

a) joint ownership of assets in the partnership capital account b) operation under a firm name c) a joint bank account d) a single set of business records e) management participation of all parties f) sharing of profits and losses

Question 73

Why is a partnership easier and cheaper to form than a corporation?

Answer 73

It requires more records than a sole proprietorship but not as many as a corporation.

Question 74

Why is a partnership a flexible form of business organization?

Answer 74

A partnership allows many types of arrangements included in a written agreement.

Question 75

What is the disadvantage of a general partner compared to a limited partner?

Answer 75

The liability of a general partner can extend even to their personal assets in the case of any unpaid financial obligation.

Question 76

Who can claim a partner's personal assets?

Answer 76

Creditor

Question 77

What are the three disadvantages of a partnership?

Answer 77

a) a partner can act individually in the partnership for legal and financial transactions b) too many partners or an unstructured management system can create problems c) sharing of management decisions and loss of personal freedom can be a potential source of conflict

Question 78

It is a legal entity that must be formed and operated in accordance with the laws of state.

Answer 78

Corporation

Question 79

What makes a corporation different from partnerships?

Answer 79

In a corporation, there is a legal "person" that is separate and apart from its owners, managers and employees.

Question 80

What are the three individuals involved in a corporation?

Answer 80

a) shareholders (owners) b) directors c) officers (operative managers)

Question 81

They own the corporation.

Answer 81

Shareholders

Question 82

What is issued to the shareholders?

Answer 82

Stock Certificates

Question 83

Stock certificates are issued to the shareholders in exchange for ______ or ______ transferred to the corporation.

Answer 83

Property, Cash

Question 84

They are elected by shareholders at an annual meeting and usually holds office for 4-5 years

Answer 84

Directors

Question 85

They are responsible to the shareholders for the management of the business.

Answer 85

Directors

Question 86

They are elected by the board of directors.

Answer 86

Officers

Question 87

They are responsible for the day-to-day operation of the business within the guidelines established by the board.

Answer 87

Officers

Question 88

What are the advantages of a corporation?

Answer 88

a) provides a limited liability for all the shareholders or owners b) personal assets of the shareholders cannot be attached by creditors to meet financial obligation c) convenient way to divide and transfer business ownership d) sharing of stocks can easily be purchased, sold or given as gifts e) transferring stocks does not reduce the size of the business

Question 89

How much does the limited liability of a corporation cover for the shareholder or owner?

Answer 89

The shareholders are only legally responsible only to that extent of the capital they have invested in the corporation.

Question 90

What are the three disadvantages of a corporation?

Answer 90

a) costly to form and maintain b) legal fees are necessary in organizing a corporation c) all the minutes of the meeting and annual reports must be filed with the state

Question 91

How much is the legal fee to form a corporation in Hungary?

Answer 91

5 million HUF

Question 92

It resembles a partnership but offers its members the advantage of limited liability.

Answer 92

Limited Liability Company

Question 93

What makes the liability of an LLC different from the liability of corporation?

Answer 93

Creditors can pursue the assets of LLC but cannot go after personal or business assets owned individually by its members.

Question 94

True or False | Limited Liability Companies (LLC) can include any number of members that can participate in management.

Answer 94

True

Question 95

Ownership in LLC is distributed according to the __________ contributed, as in partnership.

Answer 95

fair market value of assets

Question 96

What is LLC?

Answer 96

Limited Liability Companies

Question 97

They are made up of independent persons who wish to carry out one particular operation jointly.

Answer 97

Cooperatives

Question 98

In a cooperative, who can enjoy limited liability on contributions?

Answer 98

Members who contribute capital

Question 99

How many votes does the members of a cooperative have?

Answer 99

Only ONE VOTE each regardless of how much they own the cooperative.