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Multiple Choice Quiz
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1
In the U.S., which form of business ownership represents about 20% of all businesses and accounts for about 80% of all business receipts?
A)corporation
B)partnership
C)sole proprietorship
D)limited liability partnership
2
Compared to sole proprietorships, partnerships:
A)require less red tape to organize
B)must have a board of directors
C)pay income tax according to the partnership tax structure
D)enjoy more financial resources
3
Art and James decided to pool their talents and form a partnership. In forming their new partnership, Art and James:
A)are required by law to obtain a permit from the state government.
B)would do well to consult an attorney and put their agreement in writing.
C)must pay both individual and partnership taxes on any income they earn.
D)must divide their profits and losses equally.
4
Juanitra recently invested $4000 that her aunt had left her in stock in the Micky Dee Development Corporation. Juanitra has become a(n)_____________ of Micky Dee Corporation.
A)owner
B)manager
C)creditor
D)partner
5
The result of two firms combining to form one company is called a:
A)joint tenancy.
B)tenancy in common.
C)merger.
D)marriage.
6
A merger involving a major candy company and a steel producer would be an example of a:
A)vertical merger.
B)horizontal merger.
C)strategic merger.
D)conglomerate merger.
7
Regarding the relationship between the basic forms of business ownership and a franchise, a franchise can not be formed as a ______________.
A)sole proprietorship
B)partnership
C)corporation
D)LLT
8
CarX is an organization that sells franchises to prospective businesspersons. In a franchise arrangement, CarX would be the_____________, and the buyer of the franchise is the _____________________.
A)franchisee; franchisor.
B)franchisor; franchisee.
C)co-signer; co-signee.
D)distributor; retailer.
9
Twenty-six years ago, several small apple growers in Illinois joined voluntarily to market their apples in an attempt to get better prices. Over the years they expanded the organization to include other services such as buying and selling farm supplies and equipment and providing financial and technical services. The arrangement established by these apple growers is an example of a(n):
A)limited liability corporation.
B)joint venture.
C)limited partnership.
D)cooperative.
10
All of the following are advantages of franchises except:
A)management and marketing assistance
B)financial advise and assistance
C)complete freedom from rules, regulations, and restrictions
D)historically lower failure rate than independent businesses





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