A Short Business Management Sample Quiz

Explanation
A corporation is a form of business that can have many owners and issue stock. Unlike sole-proprietorship or partnership, a corporation is a separate legal entity from its owners, known as shareholders. This means that the corporation can enter into contracts, own property, and be held liable for its own debts and obligations. Additionally, a corporation can issue stock, which represents ownership in the company and allows shareholders to have a voice in the decision-making process. This structure provides flexibility and allows for the potential to raise large amounts of capital through the sale of stock.

Explanation
In a sole-proprietorship, the owner is responsible for all debts. This means that if the business incurs any financial obligations or liabilities, the owner is personally liable for them. Unlike in a corporation or partnership where the business entity itself is responsible for its debts, in a sole-proprietorship, there is no legal distinction between the owner and the business. This means that the owner's personal assets can be used to satisfy any outstanding debts of the business.

Explanation
A manufacturer is a business that takes natural resources and converts them into a consumer good. They are responsible for the production process, which involves transforming raw materials into finished products that can be sold to consumers. Manufacturers play a crucial role in the supply chain by adding value to the resources they use and creating products that meet the needs and demands of consumers.

Explanation
Custom manufacturing is the correct answer because it refers to a form of production where products are made to fit the specific needs and requirements of individual customers. This process involves tailoring the design, materials, and specifications of the product to meet the unique demands of each customer. Unlike mass production or bulk manufacturing, which produce large quantities of standardized products, custom manufacturing focuses on creating personalized and customized products for individual customers. Marketing, on the other hand, is a separate function that involves promoting and selling products or services to customers.

Explanation
The parent company of a franchise is known as the franchisor. The franchisor is the entity that grants the rights to operate a franchise to the franchisee. They provide the business model, support, and brand recognition to the franchisee in exchange for fees and royalties. The franchisor typically has control over the operations and standards of the franchise system. "Franchisee" refers to the individual or entity that operates the franchise, while "Big Daddy" is not a commonly used term in the context of franchising.

Explanation
All of the options mentioned - generating ideas, raising capital, and keeping records - are activities performed by businesses. Generating ideas refers to the process of coming up with new concepts or innovations to improve products, services, or operations. Raising capital involves obtaining funds or financial resources to support business activities and growth. Keeping records involves maintaining accurate and organized documentation of financial transactions, inventory, customer information, and other relevant data to monitor and analyze business performance. Therefore, all three options are valid activities performed by businesses.

Explanation
The group that is in charge of making business decisions for a corporation is the Board of Directors. They are responsible for setting the overall direction and strategy of the company, making important decisions, and representing the interests of shareholders. The Board of Directors typically consists of a group of individuals who are elected by shareholders and have the authority to make key decisions regarding the company's operations, finances, and policies.

Explanation
A marketer is responsible for promoting and selling products or services to consumers. However, the question asks for a type of business that moves goods from the manufacturer to the consumer. The correct answer should be a wholesaler, as they purchase goods in bulk from manufacturers and distribute them to retailers or directly to consumers. A marketer may be involved in the distribution process, but their primary role is in advertising and promoting the products.

Explanation
A mining company is considered an extractor because it engages in the extraction of resources from the earth. This involves the process of physically removing minerals, metals, or other valuable materials from the ground. The company's primary focus is on extracting these resources, rather than marketing, manufacturing, or wholesaling them.

Explanation
A partnership does not issue stock to raise capital. Unlike corporations, partnerships do not have shareholders or issue stock. Instead, partnerships raise capital through contributions from the partners, borrowing funds, or reinvesting profits back into the business. Therefore, the statement is false.