Bankruptcy is the inability to get funds to start a small business.
A franchisee owns the franchise’s name and distinctive elements and licenses others to
sell its products.
Preferred stockholders give up their right to receive profits in exchange for the right to
vote for the corporation’s directors.
Growing companies are best financed entirely with debt financing.
A company should be audited annually to ensure continued proper financial reporting.
Combination franchising is the ideal arrangement for big-name franchise operations to
avoid cultural clashes.
High quality tends to result in lower production costs.
Tax paid to the taxing authority by the person or business against which it is levied is
known as _____.
a) direct tax
b) value added tax
c) indirect tax
d) sales tax
Which of the following is true of a limited liability partnership?
a) The most common type of industry for this type of organization is agriculture, or
family farms.
b) States that recognize limited liability partnerships sometimes limit them to
organizations that provide a professional service for which each partner is licensed.
c) In a limited liability partnership, partners do not report their profits and losses on
their personal tax returns.
d) One of the disadvantages of a limited liability partnership is that it does not protect
individual partners from personal liability for the negligent acts of other partners.
_____ take actual physical possession of goods and then market them to other channel
members, or industrial users.
a) Wholesalers
b) Brokers
c) Agents
d) Retailers
In the context of small businesses, _____ comes from lenders who will be repaid at a
specified interest rate within a specified time span.
a) equity financing
b) debt financing
c) venture funding
d) stock market funding
_____ is a list of the job’s duties, responsibilities, and working conditions in the
organization.
a) Job description
b) Job forecast
c) Job inventory
d) Job plot
_______ are intermediaries who buy designer labels of clothing and sell them at less
than typical retail prices.
a) Brokers
b) Off-price retailers
c) Mass-merchandising shopping chains
d) Wholesalers
The _____ form of business generates significant revenues in services, trade, and
construction in the United States.
a) partnership
b) cooperative
c) corporation
d) proprietorship
_____ sell goods directly to the ultimate consumer.
a) Wholesalers
b) Retailers
c) Producers
d) Telecommuters
What is a competitive edge?
a) A particular characteristic that makes one firm more attractive to customers than
other firms
b) A concept that two or more people, working together in a coordinated way, can
accomplish more than the sum of their independent efforts
c) An organized effort to gather information about markets or customers
d) An assessment of the strengths and weaknesses of current and potential competitors
Which of the following is true of assessment of the quality of a product?
a) It depends on the expectations of the producer.
b) It is relative.
c) It is independent of the expectations of the customer.
d) It can always be measured objectively.
What is a business’s obligation to follow desirable courses of action in terms of society’s
values and objectives called?
a) Collectivism
b) Social responsibility
c) Business ethics
d) Ethnocentrism
_____ as a source of information about computer hardware, software, and training is
more oriented to specific hardware and software, but permits comparison of detailed
technical specifications.
a) Bulletin board
b) Industry association
c) Government publication
d) Computer company promotional material