section 01 - forms of business organization

Question 1

unincorporated business owned & run by a single person who has rights to all profits & unlimited liability for all debts of the firm; most common form of business organization in the US

Answer 1

sole proprietorship, proprietorship

Question 2

requirement that an owner is personally & fully responsible for all losses & debts of a business; applies to proprietorships, general partnerships

Answer 2

unlimited liability

Question 3

stock of goods held in reserve; includes finished goods waiting to be sold & raw material to be used in production

Answer 3

inventory

Question 4

situation in which a firm legally ceases to exist even an owner dies, quits, or a new owner if added; applies to sole proprietorships & partnerships

Answer 4

limited life

Question 5

unincorporated business owned & operated by two or more ppl who share the profits & have unlimited liability for the debts & obligations of the firm; same as general partnership

Answer 5

partnership

Question 6

form of partnership where one or more partners are not active in the daily running of the business, & whose liability for the partnership’s debt is restricted to the amount invested in the business

Answer 6

limited partnership

Question 7

court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time

Answer 7

bankruptcy

Question 8

form of business organization recognized by law as a separate legal entity with all the rights & responsibilities of an individual, including the right to buy $ sell property, enter into legal contacts, sue, & be sued

Answer 8

corporation

Question 9

written govern’t approval to establish a corporation; includes company name, address purpose of business, number of shares of stock, & other features of the business

Answer 9

charter

Question 10

certificate of ownership in a corporation; common or preferred stock

Answer 10

stock

Question 11

person who owns a share or shares of stock in a corporation; same as shareholders

Answer 11

stockholder & shareholder

Question 12

check paid to stockholders, usually quarterly, representing portion of corporate profits

Answer 12

dividend

Question 13

formal contract to repay borrowed money & interest on the borrowed money at regular future intervals

Answer 13

bond

Question 14

process of creating goods & services with the combined use of land, capital, labor, & entrepreneurship

Answer 14

principal

Question 15

payment made for the use of borrowed money; usually paid at periodic intervals for long-term bonds or loans

Answer 15

interest

Question 16

feature of taxation that allows stockholder’s dividends to be taxed both as corporate profits & as personal income

Answer 16

double taxation