ENG106: Academic
Oral Communication Skills for Managerial Ethics (BU103)
Ch.
Bauer-Ramazani
LECTURE QUIZ
Types of
Business Organization / 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
1 point; points for essay questions vary (see points in
parentheses).
1.
LIST
the four forms of business ownership discussed and give
examples of each one. (6 pts)
a.
b.
c.
d.
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 ___________.
4. The most
distinguishing characteristic of corporations is that
they _____________________.
5. T/F The
number of corporations in the US is greater than the number of
single proprietorships.
6. T/F A
sale is generated (made) by exchanging money for a good
or service.
8. T/F The
partnership has similar advantages and disadvantages as the single
proprietorship.
9. T/F
Corporations dominate the dollar value of business.
10. T/F There
are so many single proprietorships in the US because there are many
advantages associated
with single proprietorships.
11.
EXPLAIN why the single proprietorship has a tax advantage
(over the corporation).
12. T/F In a
single proprietorship, the profit that the business makes is
included in the owner’s personal income tax.
13.
The risk of losing one's car or house in case a single
proprietorship goes bankrupt is called
__________________________________.
14. T/F If a
business fails, the bank can seize the owner’s personal assets.
15.
NAME the 2 reasons why it is difficult for sole proprietors
to raise money (funds) for expanding the business.
16.
In a sole proprietorship, the ____________________ makes all
the decisions and has all the control.
17.
DEFINE continuity.
18. T/F It is
easy and quick to sell a single proprietorship or partnership.
19.
DEFINE bankrupt. (2 pts)
20.
T/F Single proprietors can issue stock.
21.
T/F In a stock issue, a company sells stock to shareholders,
and the shareholders pay money to the company for the stock.
22. If you
have invested $100 in a corporation by buying its stock, and the
company goes bankrupt, how much money can you lose?
___________________
23.
If you want to buy stock in a corporation, you call a
______________________.
24.
The fact that we can buy and sell stock on the Internet or
over the phone in about 5 minutes shows the concept of
_________________________________.
25.
T/F An investor
in a corporation can lose his car and house if the corporation goes
bankrupt.
26.
The corporation is a legal entity and has
perpetual life. What do these 2 terms mean?
27. T/F A
corporation can sign contracts, borrow money, own property, sue, and
be sued in court.
28. T/F When one shareholder sells
all of his investment (stock) to another shareholder (investor), the
corporation will cease to exist (= die).
29. NAME the
2 reasons why corporations have easier access to capital
to grow their business.
30.
Look at the corporation’s income statement. Write it here.
How can you calculate pre-tax income?
31.
Money that the company pays out to its shareholders on a
regular basis is called ____________________.
32.
T/F Dividends are income to the investor.
33.
T/F All companies pay dividends to their
stockholders.
34.
T/F Investors are taxed by the government on
their dividends.
35./36.
Corporations have to pay income taxes to the
government. When corporations declare a dividend, the shareholders
have to pay income taxes on the dividend. This business principle
is called ________________________________ and is a major ADVANTAGE
/ DISADVANTAGE of the corporation.
37.
T/F Corporations are more complex and costly to form
than sole proprietorships.
38.
Publicly-held corporations are subject to disclosure
requirements. This means that they must provide the public
with information on __________________________________.
39.
T/F Stockholders are always employees of an
organization.
40.
T/F The Board of Directors is a
group of employees of a company.
41.
LIST at least 3 rights and risks of the stockholders.
(Extra credit for more than 3)
42. T/F When
a company goes bankrupt, the stockholders are the first to receive
the money owed to them.
43. T/F The
Board of Directors is a group of representatives of all the
company's stockholders.
44. T/F The
Board of Directors is elected by the stockholders.
45.
LIST at least 3 responsibilities of the Board of Directors. (Extra
credit for more than 3)
46. T/F The
CEO (Chief Executive Officer) manages the day-to-day operations of
the company.
47. T/F A Limited
Liability Corporation (LLC) provides limited liability for
its owners but is taxed only once, at the personal income level.
48. The owners' investment in a company is called
____________________.
49. Return on Equity (ROE)
measures how much
____________________________________________________________ (2
points)
50. When a business has a net income of $100,000 and
its investors have invested $1,000,000 in equity, it has a return on
equity of ________ %.
51. ROE is calculated by dividing
____________ into _______________.
52. When a business has an ROE of 10%, this
means that for every dollar the shareholders invested, they earned
(returned)
a. $1
b. 10 cents
c. $100
d. $1,000
53. When a larger company buys a smaller company, this is called
a(n) __________________.
54. When a company divides its business into 2 or 3 new
businesses, this is called a _________________________.
55. When two companies set up a new company together, this is
called a _________________________.
56. List the four stakeholders in a business.
57. Each type of business impacts stakeholders
differently. For each of the four stakeholder groups, state
one positive and one negative impact.
| Stakeholder |
Positive impact |
Negative Impact |
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© 2011
Christine Bauer-Ramazani, Saint Michael's
College. Last updated:
September 7, 2017
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