Question 1

What is the major drawback of accepting venture capital?

Accepted Answer

A)   sharing company control
B)   having to pay high interest rates
C)   limiting expansion
D)   facing a short repayment period
E)   having to write a proposal

Question 2

Which of the following, if True about the owners' plan for the new business, would strengthen the case that it should be registered as an S corporation?

Accepted Answer

A)   They want their shareholders to be personally liable for the corporation's debts.
B)   They want to have an unlimited number of shareholders.
C)   They do not want the company to have to pay a corporate income tax.
D)   They do not want to have to meet any start-up requirements.
E)   They don't want to have a board of directors.

Question 3

Discuss the advantages and disadvantages of partnerships.

Accepted Answer

Advantages of partnerships include their...

Question 4

Explain the basic issues involved in managing a corporation.

Accepted Answer

Corporations sell shares, called stock, ...

Question 5

A limited liability corporation is a hybrid of a publicly held corporation and a partnership.

Accepted Answer

A) True 
 B)False

Question 6

The Miller brothers are not sure how to organize their business. What are their options in terms of legal form?

Accepted Answer

The three general forms of business owne...

Question 7

The board of directors of a corporation reports to the officers of the corporation.

Accepted Answer

A) True 
 B)False

Question 8

Assuming the farm is organized as a private corporation, what are the disadvantages?

Accepted Answer

The disadvantages of a private...

Question 9

Which of the following legal forms of business is owned and usually operated by a person who is responsible for its debts?

Accepted Answer

A)   cartel
B)   corporation
C)   general partnership
D)   sole proprietorship
E)   limited partnership

Question 10

Which of the following industry groups is the fastest growing segment of small business enterprise?

Accepted Answer

A)   manufacturing
B)   wholesaling
C)   retailing
D)   transportation
E)   services

Question 11

Which of the following is the most significant disadvantage of franchising?

Accepted Answer

A)   high start-up costs
B)   risk of failure
C)   difficulty in obtaining financing
D)   lengthy contracts
E)   high cost of operation

Question 12

What is the name of the document in which an entrepreneur summarizes his or her business strategy for a proposed new venture?

Accepted Answer

A)   success chart
B)   director's guideline
C)   financial blueprint
D)   business plan
E)   balance sheet

Question 13

Which type of business is legally considered a separate entity from its owners and is liable for its own debts?

Accepted Answer

A)   sole proprietorship
B)   corporation
C)   limited partnership
D)   cooperative
E)   general partnership

Question 14

Which of the following helps entrepreneurs gain skills that are essential for running a business?

Accepted Answer

A)   ESOP
B)   SBICs
C)   SEC
D)   LLC
E)   SBA

Question 15

Neglect is a major factor that contributes to small business failure.

Accepted Answer

A) True 
 B)False

Question 16

Entrepreneurs often enjoy working for large organizations.

Accepted Answer

A) True 
 B)False

Question 17

What type of business has two or more owners who share in the operation of the firm and are financially responsible for its debts?

Accepted Answer

A)   corporation
B)   partnership
C)   cooperative
D)   conglomerate
E)   nonprofit

Question 18

Explain entrepreneurship and describe key entrepreneurial characteristics.

Accepted Answer

Entrepreneurs are people who assume the ...

Question 19

What type of corporations are those comprised of doctors, lawyers, or accountants most likely to be?

Accepted Answer

A)   private
B)   public
C)   subchapter S
D)   professional
E)   multinational

Question 20

Corporations enjoy significant tax benefits when compared to sole proprietorships or partnerships.

Accepted Answer

A) True 
 B)False

Exam 3: Entrepreneurship, New Ventures, and Business Ownership

Which of the following industry groups is the fastest growing segment of small business enterprise?

Correct AnswerverifiedShow Answer

What type of business has two or more owners who share in the operation of the firm and are financially responsible for its debts?

Correct AnswerverifiedShow Answer

What type of corporations are those comprised of doctors, lawyers, or accountants most likely to be?

Correct AnswerverifiedShow Answer

Explain the basic issues involved in managing a corporation.

Correct AnswerverifiedCorporations sell shares, called stock, ...View AnswerShow Answer

Which of the following is the most significant disadvantage of franchising?

Correct AnswerverifiedShow Answer

What is the name of the document in which an entrepreneur summarizes his or her business strategy for a proposed new venture?

Correct AnswerverifiedShow Answer

Which of the following legal forms of business is owned and usually operated by a person who is responsible for its debts?

Correct AnswerverifiedShow Answer

A limited liability corporation is a hybrid of a publicly held corporation and a partnership.

Correct AnswerverifiedShow Answer

Which of the following helps entrepreneurs gain skills that are essential for running a business?

Correct AnswerverifiedShow Answer

Entrepreneurs often enjoy working for large organizations.

Correct AnswerverifiedShow Answer

Which type of business is legally considered a separate entity from its owners and is liable for its own debts?

Correct AnswerverifiedShow Answer

The board of directors of a corporation reports to the officers of the corporation.

Correct AnswerverifiedShow Answer

Discuss the advantages and disadvantages of partnerships.

Correct AnswerverifiedAdvantages of partnerships include their...View AnswerShow Answer

Corporations enjoy significant tax benefits when compared to sole proprietorships or partnerships.

Correct AnswerverifiedShow Answer

Assuming the farm is organized as a private corporation, what are the disadvantages?

Correct AnswerverifiedThe disadvantages of a private...View AnswerShow Answer

Explain entrepreneurship and describe key entrepreneurial characteristics.

Correct AnswerverifiedEntrepreneurs are people who assume the ...View AnswerShow Answer

Which of the following, if True about the owners' plan for the new business, would strengthen the case that it should be registered as an S corporation?

Correct AnswerverifiedShow Answer

Neglect is a major factor that contributes to small business failure.

Correct AnswerverifiedShow Answer

What is the major drawback of accepting venture capital?

Correct AnswerverifiedShow Answer

The Miller brothers are not sure how to organize their business. What are their options in terms of legal form?

Correct AnswerverifiedThe three general forms of business owne...View AnswerShow Answer

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Correct Answer
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Corporations sell shares, called stock, ...
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Correct Answer
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Correct Answer
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Advantages of partnerships include their...
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The disadvantages of a private...
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Correct Answer
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Entrepreneurs are people who assume the ...
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Correct Answer
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Correct Answer
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Correct Answer
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The three general forms of business owne...
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