Ib Business And Management Business Organisation & Environment: 1.2

50 Questions

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Ib Business And Management Business Organisation & Environment: 1.2

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Questions and Answers
  • 1. 
    A public limited company can advertise its shares and have them quoted on the stock exchange
    • A. 

      True

    • B. 

      False

  • 2. 
    The liability of shareholders is limited to the amount of their invetsment
    • A. 

      True

    • B. 

      False

  • 3. 
    All businesses have an aim to make profit for their owners
    • A. 

      True

    • B. 

      False

  • 4. 
    Survival is the main aim of businesses in the long run
    • A. 

      True

    • B. 

      False

  • 5. 
    Public corporations are also known as public companies
    • A. 

      True

    • B. 

      False

  • 6. 
    Public corporations operate in the public sector 
    • A. 

      True

    • B. 

      False

  • 7. 
    Public limited companies (PLCs) are an example of public sector organisations, and private limited companies are an example of private sector organisations
    • A. 

      True

    • B. 

      False

  • 8. 
    A not for profit organisation is any organisation that does not primarily aim to make a profit
    • A. 

      True

    • B. 

      False

  • 9. 
    All non-governmental organisations (NGOs) operate in the private sector
    • A. 

      True

    • B. 

      False

  • 10. 
    'Limited liability' means that if a firm is unable to pay back its debts, the owners of the business can lose everything, including their personal possessions
    • A. 

      True

    • B. 

      False

  • 11. 
    Presssure groups can constrain as well as foster business activity
    • A. 

      True

    • B. 

      False

  • 12. 
    'Unlimited liability' means that if a firm is unable to pay back its debts, the owners of the business can lose everything, including their personal possessions
    • A. 

      True

    • B. 

      False

  • 13. 
    • A. 

      Sets up the safest form of business organisation

    • B. 

      Has exclusive responsibility for running the business

    • C. 

      Is legally liable for any debts of the business

    • D. 

      Forms a business with another single person

  • 14. 
    In comparison to other forms of businesses, sole proprieters face the problem of
    • A. 

      Specialisation

    • B. 

      Continuity

    • C. 

      Administration set up procedures

    • D. 

      Privacy of account

  • 15. 
    Advantages of sole traders do not include
    • A. 

      Flexibility and freedom in decision making

    • B. 

      Profits not having to be shared with others

    • C. 

      A high degree of confidentiality in administration and financial reporting

    • D. 

      The various sources of finance available

  • 16. 
    Disadvantages of sole traders exclude
    • A. 

      The demands of having to be multi-skilled

    • B. 

      A reliance on the efforts and liability of just one person

    • C. 

      Constraint of lack of time and specialisation

    • D. 

      Autonomy in decision-making

  • 17. 
    Which of the following is not a necesary condition for an ordinary partnership
    • A. 

      Signing the contents of a partnership deed

    • B. 

      Having between 2-20 partners

    • C. 

      Having at least one partner with unlimited liability

    • D. 

      Shares cannot be issued by the business

  • 18. 
    Which statement does not apply to charities
    • A. 

      They are not-for-profit organisations

    • B. 

      They promote and raise money for good causes

    • C. 

      They are private sector businesses

    • D. 

      They are registered as having limited liability

  • 19. 
    Which of the statements are false?
    • A. 

      A private limited company cannot sell its shares on a stock exchange

    • B. 

      Second-hand shares of public companies can be traded on a stock exchange

    • C. 

      Public limited companies operate in the private sector

    • D. 

      The Board of Directors of a private limited company own the business

  • 20. 
    Which of the following statements about shareholders is correct?
    • A. 

      As co-owners of a corporation, they have equal voting rights

    • B. 

      An advantage of shareholders is having limited liability

    • C. 

      They own and control private and public limited companies

    • D. 

      They are always given dividends twice a year as their return for investing in a company

  • 21. 
    Identify the incorrect statement below
    • A. 

      Public companies operate in the public sector

    • B. 

      Silent partner is another name for sleeping partner

    • C. 

      A Deed of Partnership is advised as it helps to resolve disagreements

    • D. 

      Shareholders are not personally liable for the debts of their business

  • 22. 
    The shareholders of a company
    • A. 

      Are wealthier than sole traders or partners

    • B. 

      All have voting rights

    • C. 

      Are legally entitled to a share of the company's profits

    • D. 

      Control the running of the business

  • 23. 
    Which of the following is least likely to be a non-profit organisation?
    • A. 

      Museums

    • B. 

      Performance art groups

    • C. 

      Police force

    • D. 

      Public transport firms

  • 24. 
    Unincorporated means that a business
    • A. 

      Has shareholders

    • B. 

      Has unlimited liability for its debts

    • C. 

      Is a separate legal entity from its owners

    • D. 

      Is owned by one person

  • 25. 
    Incorporated means that a business
    • A. 

      Does not have shareholders

    • B. 

      Has unlimited liability for its debts

    • C. 

      Has limited liability for its debts

    • D. 

      It is owned by at least two individuals

  • 26. 
    Which of the following is not a pressure group
    • A. 

      World Wildlife Fund

    • B. 

      Oxfam International

    • C. 

      National Union of Teachers

    • D. 

      Non-executive directors of a company

  • 27. 
    Which of the following is not a reason why people may choose to set up their own business?
    • A. 

      There are higher risks than working for someone else

    • B. 

      To enjoy autonomy in decision making

    • C. 

      To extend personal interests and hobbies

    • D. 

      A lack of employment opportunities

  • 28. 
    Which statement does not apply to sole traders?
    • A. 

      The business is owned by one person

    • B. 

      There may be more than one employee

    • C. 

      There can be more than one employer

    • D. 

      It is the most common form of ownership

  • 29. 
    Which of the following is least liely to be classed as a non-profit organisation?
    • A. 

      Private fee paying schools or colleges

    • B. 

      Charities

    • C. 

      Pressure groups

    • D. 

      Consultancy services

  • 30. 
    Which of the following is least likely to be a disadvantage of a partnership?
    • A. 

      Having to share profits

    • B. 

      Dealing with different sources of finance

    • C. 

      Less control of business activities

    • D. 

      Managing conflict and disagreement

  • 31. 
    Which of the following is least likely to be a disadvantage of a private limited company?
    • A. 

      Having to share profits

    • B. 

      Greater administration costs and effort

    • C. 

      Joint and several liability

    • D. 

      Loss of control

  • 32. 
    A public sector enterprise is
    • A. 

      An organisation owned by the state or government

    • B. 

      An organisation owned by shareholders who can trade shares on the share market

    • C. 

      An organisation owned by private shareholders only

    • D. 

      Any business that carries 'Ltd' or 'Plc' after its name

  • 33. 
    A non-profit organisation that operates in the private sector and runs for the benefit of others in society is known as a
    • A. 

      Charity

    • B. 

      Non-governmental organisation

    • C. 

      Non-profit organisation

    • D. 

      Not-for-profit organisation

  • 34. 
    The process of selling or transferring state-owned organisations to the private sector is known as 
    • A. 

      Liquidation

    • B. 

      Privatisation

    • C. 

      Transference

    • D. 

      Nationalisation

  • 35. 
    A public sector corporation is an organisation that
    • A. 

      Is owned by the government

    • B. 

      Issues shares to the general public on the stock exchange

    • C. 

      Seeks to make profit as its main objective

    • D. 

      Has limited liability

  • 36. 
    A drawback of public limited companies is that they
    • A. 

      Have limited liability

    • B. 

      Have to publish certain certain financial information to all stakeholders

    • C. 

      Rely on government funding

    • D. 

      Represent high risk to investors

  • 37. 
    Which is an example of public sector expenditure?
    • A. 

      Investment by public limited companies

    • B. 

      Donations made to charities and non-profit organisations

    • C. 

      Spending on state education and health care

    • D. 

      Spending by the general public on company stocks and shares

  • 38. 
    ____________: Involvement of the private sector, in the form of management expertise and/or financial investment, in public sector projects aimed at benefiting the public
  • 39. 
    _____________: The owner(s) is personally and fully responsible for all losses and debts of the business
  • 40. 
    _______________:  A limited company, often a large business, with the legal right tom sell shares to the general public. Its share price is quoted on the national stock exchange
  • 41. 
    ______________: a corporation's first offer to sell shares to the public
  • 42. 
    _____________: A legal concept that makes each partner in a partnership legally liable for all the debts of the partnership.
  • 43. 
    If one partner commits fraud and embezzles money leaving the partnership with unsustainable debts, each partner is _____________________ for that debt and is personally responsible to the creditors .
  • 44. 
    _____________: The only liability, or potential loss, a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder
  • 45. 
    ________________:  Someone who takes the financial risk of starting and managing a new venture
  • 46. 
    _____________: A business which is formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibilities
  • 47. 
    The number of partners a partnership can legally have is between 2 and 60
    • A. 

      True

    • B. 

      False

  • 48. 
    The number of partners a partnership can legally have is between
    • A. 

      2-60

    • B. 

      2-20

    • C. 

      2-50

    • D. 

      2-100

  • 49. 
    _____________:  The business sector that is comprised of businesses owned and controlled by individuals or groups of individuals
  • 50. 
    _____________:  The business sector that is comprised of businesses owned and controlled by governments or the state