midterm - chapter 5 Flashcards
businesses that get supplies from other producers and convert them into products, they sell their products to consumers and other businesses
manufacturers
ex. cereal maker, computer company
a business owned and controlled by just one person
sole proprietorship
a specific statement of results the business expects to achieve
goal
business that complete activities that are consumed by customers rather than offering products for sale
service businesses
a business owned and controlled by two or more people who have entered into a written agreement
partnership
businesses involved in selling the goods and services of producers to consumers and other businesses
intermediaries
ex. storage center, advertising agency, Macy’s, Target
a written contract granting permission to operate a business to sell products and services in a prescribed way
franchise
guidelines used in making consistent decisions
policies
What are the pros and cons of corporation?
- pros: owners are employees so not responsible for any lawsuits or debt
- cons: difficult to start, must meet more legal requirements, not all owners have decision making privledge, only board of directors decide how profits are shared
The people who make the major policy and financial decisions in a corporation are the
- investors
- board of directors
- managers
- owners
board of directors
a business owned and controlled by 2 or more people who have entered into an agreement
partnership
What are the pros and cons of a franchise?
- pros: don’t have to come up with logo, brand name, or products; can expand using investments made by other people
- cons: large initial capital required, no freedom for creativity, must buy products from franchiser which can be expensive, franchisee receives business profits
a short, specific written statement of the reason a business exists and what it wants to accomplish
mission statement
The form of ownership that gives one person sole control over all business decisions is the
- proprietorship
- partnership
- corporation
- franchise
proprietorship
- a group of people who oin to do some activity that benefits the public
- they work in areas such as education, health care, charity or the arts
nonprofit corporation
- offers the limited liability of a corporation
- all income is passed through to the owners based ontheir investment and is taxed on their individual tax returns
S-corporation
What are the pros and cons of sole proprietorship?
- pros: easy to start, total control over business, receives all profits, tax benefits
- cons: have to do it all on your own, can be sued, responsible for debts if the business fails
a written agreement among all owners that specifies the rules and procedures that guide ownership and operations
partnership agreement
the people who make the major policy and financial decisions for a corporation
board of directors
businesses involved in selling the goods and services of producers to consumers and other businesses
intermediaries
a business carries out activities that are consumed by its customers
service business
ex. dentists, physicians, lawyers, painters, movers, internet service providers
What is the size of a typical American business?
- most US businesses are very small
- most businesses have no employees other than the owner
a written legal document that identifies ownership and operating procedures and conditions for the business
articles of incorporation
What are the roles of busineses in the US economy?
- the most important role of busineses is to make and distribute products and services needed by consumers, government and other businesses
- businesses provide employment for millions of people
- employee wages are then used to purchase goods and services
- profits earned by businesses are used to compensate owners and investors
- businesses pay taxes to federal, state and local governments
- government then spend these taxes to provide services such as clean water, well maintained streets, police, hospitals and schools
Which of the following is not one of the common activities of all businesses?
- producing goods and services
- employing and training personnel
- marketing goods and services
- maintaining business records
producing goods and services
(not all businesses PRODUCE)
What are the 5 types of businesses?
- producer
- extractor
- manufacturer
- intermediary
- service
How do businesses impact communities?
- when new business opens, hires new employees who get paid wages
- also buy goods and services from other businesses in area
- employees and businesses then spend their money to purchase things
- money spent may result in the need for more employees in community
- when a large business opens like Target or Walmart, other businesses move to the area and more and more jobs become available
What is the purpose of businesses?
- to make the goods and services people use every day
- includes products and services used by other businesses and those needed by individual consumers
- provides liability protection for owners
- it has a simpler set of organizing and operating requirements than a corporation
- no articles of incorporation or bylaws are needed
- a simpler document much like a partnership agreement must be developed
Limited Liability Company (LLC)
a partnership that identifies some investors who cannot lose more than the amount of their investment, but they are not allowed to participate in the day-to-day management of the business.
Limited Liability Partnership
a unique business organization by two or more other businesses to operate for a limited time and for a specific project, it is a type of partnership
joint venture
What are the 5 forms of business ownership?
- sole proprietorship
- partnership
- corporation
- franchise
- nonprofit corporation
What are the pros and cons of partnership?
- pros: easy to start, owners share responsibility
- cons: have to share profits, must agree with each other, all partners responsible for debts if business fails
a separate legal entity, formed by documents filed with the state, which is owned by one or more shareholders and managed by a board of directors
corporation
a business that takes resources from nature for direct consumption or for use in developing other products
extractor
ex. oil drilling, mining coal, farming
one who has no explicit or implicit contract for long term employment
contingent worker
How has the US job market changed?
- US experienced a cycle of employment growth and decline
- careers shifting from manufacturing and agriculture work to service jobs
- employment also declines during recessions and grows during recoveries
A special form of business organization that combines advantages of a corporation and a partnership is a
- franchise
- nonprofit corporation
- cooperative
- limited liability company
limited liability company
descriptions of the way work is to be done
procedures
The largest number of US businesses employ
- more than 100 people
- between 50 and 100 people
- between 10 and 20 people
- no employees other than the owner
no employees other than the owner
individuals and organizations that determine what products and services will be available for sale
producers
ex. extractors, manufacturers
What are the 6 business activities?
- Generating Ideas - new businesses beginw ith new idea, businesses have to continue to improve and develop new ideas
- Raising Capital - need money to operate, money comes from owners and loans
- Employing and Training Personnel - hire and train employees, new employees are trained to do their jobs correctly
- Buying Goods and Services - businesses buy goods and services, use purchases for their own operation
- Marketing Goods and Services - if no marketing, products and services may be unsold
- Maintaining Business Records - keep records to track performance, make decisions, track customer’s orders and payments, submit to government
What are the 5 key stakeholders in a business?
- Who are the owners?
- Who are the creditors?
- Who are the employees?
- Who are the suppliers?
- Who are the customers?
a diagram that shows the structure of an organization, classifications of jobs, and the relationships among those classifications
organization chart
A retailer is an example of a(n)
- extractor
- producer
- intermediary
- service business
intermediary
