Forms Of Business Ownership! Trivia Questions Quiz

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| By Stan Brown
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Stan Brown
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  • 1/10 Questions

    Non-Profit corporations are not required to pay ___________ on their profits.

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About This Quiz


Do you know that there are many forms of business ownership? A partnership is just one example. During this quiz, you should grasp what the main disadvantage of being a sole proprietor is, what is the disadvantage of a franchise, what are credit unions an example of what, what does it mean to be incorporated, and which type of business do you get to be your own boss. This quiz is all about the different forms of business ownership. Good luck to you.

Forms Of Business Ownership! Trivia Questions Quiz - Quiz

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  • 2. 

    When a corporate owner dies, the corporation ceases to exit.

    • True

    • False

    • Only if he/she is not married

    Correct Answer
    A. False
    Explanation
    The statement is false because when a corporate owner dies, the corporation does not cease to exist. Instead, the ownership of the corporation may be transferred to the deceased owner's heirs or beneficiaries according to the laws of succession or the provisions of the owner's will. The corporation can continue to operate and conduct business under new ownership.

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  • 3. 

    Credit Unions are an example of a ___________________.

    • Cooperative

    • Franchise

    • Partnership

    Correct Answer
    A. Cooperative
    Explanation
    Credit unions are an example of a cooperative because they are financial institutions owned and operated by their members. Members pool their resources together to provide loans and other financial services to each other at competitive rates. The primary goal of credit unions is to serve their members' needs rather than earning profits for shareholders, making them a cooperative organization.

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  • 4. 

    A disadvantage of a franchise is ___________________________.

    • Name recognition

    • High cost to purchase

    • Limited market

    Correct Answer
    A. High cost to purchase
    Explanation
    A disadvantage of a franchise is the high cost to purchase. Franchises often require a significant upfront investment, including franchise fees, initial inventory, and equipment costs. This can be a barrier for individuals or small businesses looking to enter the franchise market. The high cost to purchase a franchise can limit opportunities for potential franchisees and make it difficult to start or expand a franchise business.

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  • 5. 

    What is the main disadvantage of being a sole proprietor?

    • High start up costs

    • Limited skills

    • Unlimited liability

    Correct Answer
    A. Unlimited liability
    Explanation
    The main disadvantage of being a sole proprietor is unlimited liability. This means that the owner is personally responsible for all debts and liabilities of the business. Unlike other business structures, such as corporations or limited liability companies, there is no legal separation between the owner and the business. Therefore, if the business incurs debts or faces legal issues, the owner's personal assets can be at risk. This can be a significant disadvantage as it exposes the owner to potential financial loss and puts their personal assets in jeopardy.

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  • 6. 

    Being incorporated provides limited liabilty for its owners.

    • True

    • False

    • If they are of legal age

    Correct Answer
    A. True
    Explanation
    Being incorporated provides limited liability for its owners because when a business is incorporated, it becomes a separate legal entity from its owners. This means that the owners, also known as shareholders, are not personally responsible for the company's debts or legal obligations. Their liability is limited only to the amount of money they have invested in the company. Therefore, if the company faces financial difficulties or legal issues, the personal assets of the owners are protected, providing them with limited liability.

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  • 7. 

    An advantage of a partnership is having access to more ___________________.

    Correct Answer
    capital
    money
    Explanation
    Partnerships provide the advantage of having access to more capital and money. This means that the partners can pool their resources and contribute more funds to the business. This increased capital can be used for various purposes such as expanding operations, investing in new equipment, or funding research and development. Having access to more capital and money gives partnerships a financial edge and flexibility to pursue growth opportunities and meet their financial obligations.

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  • 8. 

    If you want to be your own boss, make your own decisions, and keep all of the profits to yourself;  you want to form a ____________________________________________.

    Correct Answer
    sole proprietorship
    Explanation
    A sole proprietorship is a type of business entity where an individual owns and operates the business alone. In this form of business, the owner has complete control over decision-making and enjoys all the profits. It is the simplest and most common form of business ownership, offering flexibility and minimal legal formalities. As a sole proprietor, you have the freedom to make your own decisions and keep all the profits, making it an ideal choice for those who want to be their own boss.

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  • 9. 

    A sole proprietorship is taxed only once.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    A sole proprietorship is taxed only once because it is not considered a separate legal entity from its owner. The income and expenses of the business are reported on the owner's personal tax return, and the owner is responsible for paying taxes on the business profits. This means that the business itself does not pay separate taxes like a corporation or partnership would. Therefore, the statement "A sole proprietorship is taxed only once" is true.

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  • 10. 

    A partnership is made up of 2 people.

    • True

    • False

    • If they agree

    Correct Answer
    A. False
    Explanation
    The statement "A partnership is made up of 2 people" is false. A partnership is a business structure where two or more individuals agree to share profits, losses, and responsibilities. While it is common for partnerships to have two partners, it is not a requirement. Partnerships can have more than two partners, depending on the agreement between the parties involved. Therefore, the statement is incorrect.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Nov 03, 2009
    Quiz Created by
    Stan Brown
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