Unit 3 Test Review

Question 0

Sole proprietorship

Answer 0

A business owned and managed by a single individual.
•Most popular in the United States.
•Advantages of sole proprietorship:
•Ease of Start-Up
•Most states have minimum requirements that include authorization, site permit, and name.

Question 1

A business organization

Answer 1

Is an establishment formed to carry on commercial enterprise.
•Sole proprietorships are the most common forms of business organizations.

Question 2

Business license

Answer 2

authorization to start a business issued by the local government.

Question 3

Zoning laws

Answer 3

Sole proprietorships may also be subject to local

Question 4

Liability

Answer 4

Is the legally bound obligation to pay debts.

•Even if the business fails, the owner is still responsible for the debt the business acquired.

Question 5

Fringe benefits

Answer 5

are payments to employees other than wages or salaries.

Question 6

A partnership

Answer 6

is a business organization owned by two or more persons who agree on a specific division of responsibilities and profits.

Question 7

General Partnership

Answer 7

partners share equally in both responsibility and liability.

Question 8

Limited Partnership

Answer 8

only one partner has unlimited personal liability for the firm’s actions.

Question 9

Limited Liability Partnership (LLP)

Answer 9

all partners are limited partners.

Question 10

Professional organizations

Answer 10

work to improve the image, working conditions, and skill levels of people in particular occupations.

Question 11

Trade associations

Answer 11

are nonprofits that promote the interests of a particular industries.

Question 12

Business associations

Answer 12

promote the collective business interests of a city, state, or other geographical area, or of a group of similar businesses.

Question 13

Producer cooperatives

Answer 13

agricultural marketing cooperative that helps members sell their products.

Question 14

Service cooperatives

Answer 14

they provide a service rather than a good.

Question 15

Consumer cooperatives

Answer 15

retail outlet owned and operated by consumers.

Question 16

Cooperative

Answer 16

is a business organization owned and operated by a group of individuals for their shared benefit.

Question 17

Business franchise

Answer 17

is a semi-independent business that pays fees to a parent company.

Question 18

Multinational corporations

Answer 18

are the world’s largest corporations that produce and sell their goods and services throughout the world.

Question 19

Conglomerates

Answer 19

are firms that have more than three businesses that make unrelated products.

Question 20

Vertical mergers

Answer 20

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