Ch 3 Pre-test Ent(Mod)
.
- 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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