Chapter 02 Family-Owned Businesses Answer Key
Multiple Choice Questions
1.
Which agency is responsible for estimating the percentage of family-owned businesses in
the North American business enterprise?
2.
_____ businesses are considered the backbone of the American business industry.
3.
Which of the following statements is true of family-owned businesses in the United
States?
4.
In order to cope with the daily challenges of a family-owned business, the family should:
5.
A developing trend in family businesses is that young people:
6.
_____ refer to family-owned businesses run by husband-and-wife teams.
7.
Which of the following situations should copreneurs avoid?
8.
How can copreneurs efficiently manage their family-owned business?
9.
Conflicts are likely to arise in a small family-owned business when:
10.
A way to deal with incompetent family members in a family-owned business is to:
11.
Which of the following steps should a family-owned business take to compensate family
members?
12.
A limitation of a small family-owned business is that a family manager may:
13.
Which of the following is an advantage of hiring professional managers to run family-
owned businesses?
14.
A disadvantage of organizing a family business into a corporation and hiring professional
managers is the:
15.
A home-based business is an attractive option for working mothers because:
16.
Expansion of small family-owned businesses may be limited by:
17.
How can children be prepared to enter a family-owned business?
18.
Which of the following statements is true of the findings of a classic survey of owners of
family-owned businesses with two or more children working for the company?
19.
Why are a number of entrepreneurs turning to formal succession plans for their family-
owned businesses?
20.
A(n) _____ is a document that contains instructions about what should be done with a
family-owned business if the owner suddenly dies or becomes incapacitated.
21.
If a family-owned business is a corporation, replacement of ownership is decided by:
22.
Which of the following is an advantage of selling a family-owned business to family
members?
23.
An advantage of selling a family-owned business to outsiders is that:
24.
The transition of a family-owned business to a successor can be made easier for the
former owner by:
25.
What is estate planning?
26.
A family limited partnership allows business owners to:
27.
A _____ provides for a corporation to repurchase a shareholder’s stock when he/she
leaves the company.
28.
In the context of family-owned businesses, which of the following can be used to minimize
estate taxes?
29.
A(n) _____ resembles a will, but, in addition to providing for distributing personal assets on
the maker’s death, it also contains instructions for managing those assets should a person
become disabled.
30.
In the context of a family-owned business, which of the following is a disadvantage of a
living trust?
True / False Questions
31.
According to the Conway Center for Family Business, family-owned businesses account
for a majority of North American business enterprises.
32.
Most people-related challenges faced by family-owned businesses result from
interactions of business necessity with family values and relationships.
33.
All family-owned businesses need an appropriate mission statement to cope with the
demands of business operation.
34.
Due to their inexperience, children must be excluded when making important decisions
and setting goals for a family-owned business.
35.
Family-owned businesses often run smoothly without any conflicts among family
members.
36.
A recent trend seen in the operation of a family business is that of retired parents wanting
to work full time for their children’s businesses.
37.
Family-owned businesses run by husband-and-wife teams are referred to as copreneurs.