Forms Of Business Ownership Trivia Quiz
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What is the main disadvantage of being a sole proprietor?
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High start up costs
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Limited skills
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Unlimited liability
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About This Quiz
Explore the Forms of Business Ownership with this trivia quiz! It assesses knowledge on the pros and cons of different business structures including sole proprietorships, partnerships, corporations, and franchises. Understand key concepts like unlimited liability, capital access, and the implications of corporate and partnership setups.
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- 2.
When a corporate owner dies, the corporation ceases to exit.
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True
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False
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Only if he/she is not married
Correct Answer
A. FalseExplanation
The statement is false because the death of a corporate owner does not cause the corporation to cease to exist. A corporation is a separate legal entity from its owners, and it can continue to operate even if the owner passes away. The ownership of the corporation may be transferred to the owner's heirs or beneficiaries according to the laws and provisions set in place.Rate this question:
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- 3.
An advantage of a partnership is having access to more ___________________.
Correct Answer
capital
moneyExplanation
A partnership provides the advantage of having access to more capital and money. This means that the partners can pool their resources together, contributing more funds to the business. This increased capital can be used for various purposes such as investing in new equipment, expanding operations, or funding marketing campaigns. By having access to more capital and money, a partnership can have a stronger financial position and greater opportunities for growth and success.Rate this question:
- 4.
A disadvantage of a franchise is ___________________________.
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Name recognition
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High cost to purchase
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Limited market
Correct Answer
A. High cost to purchaseExplanation
A disadvantage of a franchise is the high cost to purchase. Franchises often require a significant upfront investment to buy into the business model and brand. This can be a barrier for potential franchisees who may not have the financial resources to afford the initial purchase. The high cost to purchase a franchise can limit opportunities for individuals who are interested in owning a franchise but cannot afford the upfront expenses.Rate this question:
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- 5.
A partnership is made up of 2 people.
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True
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False
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If they agree
Correct Answer
A. FalseExplanation
The statement "A partnership is made up of 2 people" is false. A partnership is a business structure that involves two or more individuals or entities coming together to carry out a business venture. It does not necessarily have to be limited to only two people. Partnerships can have multiple partners, each contributing to the business with their skills, resources, and expertise. Therefore, the statement is incorrect.Rate this question:
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- 6.
Non-Profit corporations are not required to pay ___________ on their profits.
Correct Answer
tax
taxesExplanation
Non-profit corporations are exempt from paying taxes on their profits. This is because they operate for charitable, educational, or social purposes, and their earnings are reinvested back into their mission rather than distributed to shareholders or owners. The exemption from taxes allows non-profit organizations to allocate more resources towards their designated cause and maximize their impact on society.Rate this question:
- 7.
Credit Unions are an example of a ___________________.
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Cooperative
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Franchise
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Partnership
Correct Answer
A. CooperativeExplanation
Credit Unions are an example of a cooperative because they are financial institutions owned and operated by their members. Members pool their resources to provide financial services to each other, such as savings accounts, loans, and other financial products. The cooperative structure ensures that the interests of the members are prioritized, and any profits are returned to the members in the form of lower fees and better rates.Rate this question:
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- 8.
A sole proprietorship is taxed only once.
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True
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False
Correct Answer
A. TrueExplanation
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, resulting in a single level of taxation.Rate this question:
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- 9.
Being incorporated provides limited liabilty for its owners.
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True
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False
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If they are of legal age
Correct Answer
A. TrueExplanation
When a business is incorporated, it becomes a separate legal entity from its owners. This means that the owners, also known as shareholders, have limited liability for the debts and obligations of the company. In other words, their personal assets are protected and they are only liable for the amount they have invested in the company. This is one of the main advantages of incorporating a business, as it provides a level of financial protection for the owners. Therefore, the statement "Being incorporated provides limited liability for its owners" is true.Rate this question:
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- 10.
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 proprietorshipExplanation
A sole proprietorship is a business structure where an individual is the sole owner and operator of the business. In this type of business, the owner has complete control over decision-making and enjoys all the profits generated by the business. This form of business is suitable for individuals who want to have full autonomy and retain all the profits for themselves.Rate this question:
Quiz Review Timeline (Updated): Mar 21, 2023 +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Dec 16, 2015Quiz Created by
DavidChapman
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