EN103: ENGLISH for ACADEMIC PURPOSES (EAP)                          Name _________________________
for Foundations of Business Administration (BU113)
Prof. Bauer-Ramazani

LECTURE QUIZ
Types of Business Organizations / Forms of Business Ownership

DIRECTIONS: Use the notes you took in class to complete the following questions.  T/F, MC, and Fill-in-the-blank questions count 2 points; points for essay questions vary (see points in parentheses).

1.     LIST the three major forms of business ownership.  (3 pts)

2.  T/F             A law firm or a doctor's office is a typical example of a single proprietorship.

3.  Synonyms of stockholders are _____________, _______________, and ___________.  (3 pts)

4.  T/F             The number of corporations in the US is greater than the number of single proprietorships.

5.     T/F             The single proprietorships in the US generate the largest amount of sales revenue of all forms of business organization.

7.  T/F  Corporations dominate the dollar value of business.

8.   T/F  There are so many single proprietorships in the US because there are many advantages associated with single proprietorships.

9.  The risk of losing one's car or house in case the business goes bankrupt is called __________________________________.

10.    One of the main reasons that it is difficult to get additional investors to put up money in a single proprietorship or partnership is because of  ____________________________.

11.    LIST the characteristics of the sole proprietorship.

12.    NAME and EXPLAIN the 3 major advantages and disadvantages of the sole proprietorship.

13.     T/F           If a customer or employee is injured on the property of a single proprietor, the owner of the business is responsible to help pay expenses from his business and personal assets.

14.    T/F            It is easy to sell a single proprietorship or partnership.

15.     DEFINE bankrupt.  (2 pts)

16.    T/F            The partnership has similar advantages and disadvantages as the single proprietorship.

17.  T/F            In a partnership the general partner has limited liability.

18.  T/F            In a partnership, all partners have the same kind of liability.

19.  LIST and EXPLAIN the major advantages and disadvantages of a partnership.

20.    T/F            S-corporations and Limited Liability Companies are types of partnerships.

21.    T/F            S-corporations and LLCs are taxed like a partnership but the partners' personal assets are protected in case of lawsuits.

22.    DEFINE charter and STATE its purpose and characteristics.

23.    T/F            Synonyms of stockholders are _____________ and ______________.

24.    T/F            An investor in a corporation can lose his car and house if the corporation goes bankrupt.

25.  T/F            The Board of Directors is a group of employees of a company.

26.   NAME the major characteristics of stockholders.

27.   EXPLAIN the two ways in which stockholders can earn a return on investment (ROI).

28.  T/F            Dividends are income to the investor in stocks.

29.  NAME and EXPLAIN the two types of corporations.

30.  T/F            The main reason for corporations to issue stock is to get funds (money).

31.  T/F            Stockholders are always employees of an organization.

32.   STATE the major advantages and disadvantages of corporations.

33.   T/F            Financial disclosure refers to the fact that all corporate financial records are secret.

34.  T/F             Agency problems refer to the fact that the owners of a corporation are not the managers of the corporation. 

35.  T/F             Investors are taxed by the government on their dividends.

36.  One of the major drawbacks of corporations is ___________________--the fact that the corporation pays corporate taxes on its income and the stockholders pay personal taxes on the dividends they receive from the corporation. 

37.  T/F             Corporations are required to pay dividends to their shareholders.

38.   T/F            All corporations pay dividends to their stockholders.

39.  DEFINE the terms franchising, franchise, franchisor, and franchisee.

40.  T/F            A car dealership is NOT a franchise.

41.  T/F            A chain (store) is NOT a franchise; it is always a single proprietorship.

42.  T/F            Companies often set up franchises in other countries by giving manufacturing licenses to local companies.

43.  T/F            Buying a franchise is a cheap way to establish a business.

44.    NAME the major advantages and disadvantages of franchises.

45.    NAME the two ways to measure business performance.

46.    DEFINE equity. 

47.    DEFINE risk.

48.  T/F            Small businesses have no risk.

49.  T/F            If a company is high-risk, investors expect a high return.

50.  T/F            Some investors invest in high-risk companies because they are expecting low profits.

51.  T/F            The typical investor invests in a variety of investment options.

52.    T/F            Return on equity is calculated as net income (earnings) divided by the amount of equity in the company. 

53.    T/F            A company with lower amounts of equity has a higher return on equity (ROE).