17: Know and Understand
Answer the following questions using the information provided in this chapter.
In what type of business structure is the sole owner responsible for all debts incurred by the business?
A. Limited partnership.
B. Corporation.
C. Sole proprietorship.
D. Cooperative.
Each of the partners in a limited liability partnership has limited liability for the company’s debts and is _____.
A. always liable for at least 50% of each partner’s negligence
B. protected from negligence of another partner
C. not protected from negligence of the other partners
D. None of the above.
Which of the following statements is true about a limited liability company (LLC)?
A. It is subject to corporate taxation in which a significant tax percentage is paid on the net income.
B. An LLC has the pass-through taxation of a partnership or sole proprietorship.
C. It has a board of stockholders that oversees the business’ activities.
D. All of the above.
A business owned by stock- or shareholders who share in profits and losses is referred to as a _____.
A. cooperative
B. general partnership
C. corporation
D. proprietorship
A document that states the mission of the business, outlines strategies for achieving goals, and examines its current condition is referred to as a(n) _____.
A. cash flow plan
B. business plan
C. balance plan
D. executive plan
Which of the following parts of a business plan explains why the business will offer higher quality services or those not currently offered by others in the area?
A. Company description.
B. Executive summary.
C. Funding requests.
D. Market analysis.
Which of the following parts of a business plan describes the legal business structure and identifies the people making and guiding decisions?
A. Organization and management.
B. Executive summary.
C. Service or product line.
D. Market analysis.
Which part of a business plan provides a detailed plan of the amount of funding needed and its intended use?
A. Executive summary.
B. Funding request.
C. Financial projections.
D. Marketing and sales.
A short summary of the values and purpose of a company is referred to as a _____.
A. balance statement
B. vision statement
C. mission statement
D. goal statement
Goals for a business may be _____.
A. financial achievements
B. reached in the near future
C. accomplished over several years
D. All of the above.
Statistical data relating to population that can be used to market directly to a target market is referred to as _____.
A. dyno-graphics
B. demographics
C. data graphics
D. domain graphics
Which of the following questions apply to selecting a business name?
A. Is the name trademarked by another company?
B. Can it be used to create a domain name?
C. Is it obscure or difficult to pronounce?
D. All of the above.
Logos, company uniforms, color schemes, services offered, and even the type of equipment owned all contribute to the company’s _____.
A. accounting
B. tax status
C. brand image
D. None of the above.
Of the following, which factors are the most influential in selecting the location of a new business?
A. Aesthetics, soil color, and scenic view.
B. Availability, current landscaping, and available sunlight.
C. Affordability, building age, and landscape quality.
D. Availability, affordability, and end use.
Under which circumstances does a business require a tax identification number?
A. When the business is a sole proprietorship with no employees.
B. When the business is an LLC with no employees.
C. When the business has two partners using pass-through taxation.
D. When the business is a corporation with multiple employees.
Which of the following statements shows the net income for a specific period?
A. Income statement.
B. Balance statement.
C. ROI statement.
D. Inventory statement.
Which of the following is the combination of a company’s current and noncurrent assets?
A. Inventory.
B. Liabilities.
C. Net worth.
D. Taxed income.
Which of the following are financial obligations of a company?
A. Long-term liabilities.
B. Accounts payable.
C. Current liabilities.
D. All of the above.
In a successful business, which of the following increases and makes the company more valuable?
A. Liabilities.
B. Funding requests.
C. Net worth.
D. All of the above.
Which type of assets cannot be converted to cash quickly?
A. Solid assets.
B. Nonliquid assets.
C. Liquid assets.
D. All of the above.
Which of the following shows how much money a business is making compared to the money it is spending?
A. ROI.
B. TIN.
C. EIN.
D. SEO.
Which of the following will help a business increase its online presence?
A. Social media.
B. Professional website.
C. Facebook and Pinterest.
D. All of the above.
Which of the following will help increase traffic to a specific website?
A. EIN optimization.
B. Online optimization.
C. Search engine optimization.
D. Website search optimization.
Which of the following may be used to promote a business?
A. Donating services to community projects.
B. Sponsoring local sports teams or fields.
C. Television, radio, and newspaper ads.
D. All of the above.
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