Ch 3 Pre-test Ent(Mod)

21 Questions | Total Attempts: 67

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Ch 3 Pre-test Ent(Mod)

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Questions and Answers
  • 1. 
    Most wholesalers sell directly to the public.
    • A. 

      True

    • B. 

      False

  • 2. 
    Retailers resell products purchased from wholesaling businesses.
    • A. 

      True

    • B. 

      False

  • 3. 
    Entrepreneurs with limited liability put their personal assets at risk.
    • A. 

      True

    • B. 

      False

  • 4. 
    The level of liability depends on the type of business ownership.
    • A. 

      True

    • B. 

      False

  • 5. 
    A corporation is easier to set up than a sole proprietorship.
    • A. 

      True

    • B. 

      False

  • 6. 
    A limited liability company is owned by its stockholders.
    • A. 

      True

    • B. 

      False

  • 7. 
    Which type of business ownership provides limited liability for the owner(s)?
    • A. 

      Corporation

    • B. 

      Sole proprietorship

    • C. 

      General partnership

  • 8. 
    One advantage of a general partnership over a sole proprietorship is a general partnership...
    • A. 

      Provides limited liability

    • B. 

      Is a corporation

    • C. 

      Can rely on more than one person for financial backing

  • 9. 
    Which of the following phrases best describes a wholesaling business?
    • A. 

      A business that converts materials into products for sale

    • B. 

      A business that sells products to final buyers

    • C. 

      A business that sells products to retailers

  • 10. 
    Most business in the United States are...
    • A. 

      Corporations

    • B. 

      Partnerships

    • C. 

      Sole proprietorships

  • 11. 
    Over the past fifty years the American economy has changed in what way?
    • A. 

      Manufacturing has replaced retailing as the most dominant industry

    • B. 

      Service businesses have become far less important to the economy

    • C. 

      Service and trade businesses have become the dominant industries

  • 12. 
    Which of the following statements about corporations is true?
    • A. 

      Corporations are easier to set up than sole proprietorships

    • B. 

      A limited partnership is a type of corporation

    • C. 

      Corporations sell stock to raise money

  • 13. 
    The business predicted to undergo the most growth in the coming decade are...
    • A. 

      Primarily service businesses

    • B. 

      Primarily manufacturing businesses

    • C. 

      Business that sell retail products to wholesalers

  • 14. 
    A business owner with unlimited liability...
    • A. 

      Could have to sacrifice personal money and possessions to pay business debt

    • B. 

      Is not personally responsible for the debts of the business

    • C. 

      Is a shareholders of a corporation

  • 15. 
    The purpose of a cooperative is...
    • A. 

      To earn profits for management

    • B. 

      To benefit its member

    • C. 

      To provide unlimited liability to its members

  • 16. 
    One advantage of a corporation as compared to a sole proprietorship is ...
    • A. 

      A corporation is easier to set up and requires less paperwork

    • B. 

      A corporation provides limited liability for its owners

    • C. 

      Is set up to make profits for its investors

  • 17. 
    A nonprofit corporation...
    • A. 

      Provides unlimited liability to its members

    • B. 

      Provides limited liability to its members

    • C. 

      Is set up to pay dividends to its shareholders

  • 18. 
    The special permit that allows retailers to purchase goods tax-free from wholesalers and collect sales tax from final buyers is called a ...
    • A. 

      Reseller's permit

    • B. 

      Retailing permit

    • C. 

      Tax permit

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