MS LAWS AND RULES
EXAM BANK 170+
QUESTIONS AND VERIFIED
ANSWERS LATEST GUIDE
2026/2027 GRADED A+ .
,1. the top reasons businesses fail ✓✓ Correct answer - poor sales
- competitive weakness
- high operating expenses
- diflculty collecting invoices
- inventory problems
- too many fixed assets
- poor location
- fraud
AKA poor planning and inadequate management
2. entrepreneur ✓✓ Correct answer a person engaged in strategic activities that involve the initiation and development of a new business, created to build long
term value and steady cash flow statements
3. calculated risk ✓✓ Correct answer a risk that is well - thought through where all outcomes are considered
4. business plan ✓✓ Correct answer - living document that changes as your business and the market change
- blueprint of your business
- outlines strategies
5. key functions of a business plan ✓✓ Correct answer 1. planning tool ✓✓ Correct answer road map for growth of business
2. loan or investor document ✓✓ Correct answer used to get a loan to show growth, qualifications and competitive adv.
3. benchmarking tool ✓✓ Correct answer measure company's performance and see why things happened
6. elements of a business plan ✓✓ Correct answer - cover page ✓✓ Correct answer contact info and confidentiality statement
- executive summary ✓✓ Correct answer highlights of plan, written last
- company summary ✓✓ Correct answer vision, mission, legal structure, management, location, and facilities
- products and services ✓✓ Correct answer subcontractors and suppliers
- market analysis ✓✓ Correct answer your market
- marketing strategy ✓✓ Correct answer pricing, advertising, uniqueness of product or service
- financial plan ✓✓ Correct answer balance sheets etc.
,7. Guidelines for business plan ✓✓ Correct answer - make sure assumptions are realistic
- keep language simple
- cover the risks and opportunities
- analyze your competition
8. benefits of business plan ✓✓ Correct answer - used as a planning and bench marking tool
- sometimes required by bank loan oflcers
9. Sole Proprietorships ✓✓ Correct answer - many businesses begin as this
- simplest ownership form to set up
- you are the sole owner of the company
- exposes you to unlimited liability for the business debt
- not good if you are running a significant business
- terminated upon owners death
- you own the assets of the company so if you sell you are selling the assets of the company
- you bear personal liability for all actions undertaken in the name of the business
- do not pay corporate tax income; your net income from the business is reported as ordinary income
- business and personal expenses must be kept separate
10. advantages of sole proprietorship ✓✓ Correct answer - minimal legal restrictions
- simple ownership form
- low start up costs
- sole ownership of profits
- freedom in decision making process
11. disadvantages of a sole proprietorship ✓✓ Correct answer - unlimited personal liability
- less available capital
- diflculty in obtaining long term financing
, - dissolution of the business in the event of owners death
12. partnership ✓✓ Correct answer relationship between two or more persons who join to carry on a trade or business
- each person contributes money, property, labor, or skills
- two types ✓✓ Correct answer general and limited partnerships
13. general partnerships ✓✓ Correct answer can be formed through oral agreement
- own the assets of the company just like a sole proprietorship
- have personal and unlimited liability
- each partner is responsible for the acts of other partners when they act in the name of the business
14. limited partnership ✓✓ Correct answer one or more general partners and one or more limited partners
- limited liability in the company; no personal liability
- liable only for the previously agreed upon contribution or investment to the business
15. what happens if a general partner dies? ✓✓ Correct answer the partnership dissolves and the assets of the partnership must be sold or
distributed to first pay the creditors and then the partners
EXAM BANK 170+
QUESTIONS AND VERIFIED
ANSWERS LATEST GUIDE
2026/2027 GRADED A+ .
,1. the top reasons businesses fail ✓✓ Correct answer - poor sales
- competitive weakness
- high operating expenses
- diflculty collecting invoices
- inventory problems
- too many fixed assets
- poor location
- fraud
AKA poor planning and inadequate management
2. entrepreneur ✓✓ Correct answer a person engaged in strategic activities that involve the initiation and development of a new business, created to build long
term value and steady cash flow statements
3. calculated risk ✓✓ Correct answer a risk that is well - thought through where all outcomes are considered
4. business plan ✓✓ Correct answer - living document that changes as your business and the market change
- blueprint of your business
- outlines strategies
5. key functions of a business plan ✓✓ Correct answer 1. planning tool ✓✓ Correct answer road map for growth of business
2. loan or investor document ✓✓ Correct answer used to get a loan to show growth, qualifications and competitive adv.
3. benchmarking tool ✓✓ Correct answer measure company's performance and see why things happened
6. elements of a business plan ✓✓ Correct answer - cover page ✓✓ Correct answer contact info and confidentiality statement
- executive summary ✓✓ Correct answer highlights of plan, written last
- company summary ✓✓ Correct answer vision, mission, legal structure, management, location, and facilities
- products and services ✓✓ Correct answer subcontractors and suppliers
- market analysis ✓✓ Correct answer your market
- marketing strategy ✓✓ Correct answer pricing, advertising, uniqueness of product or service
- financial plan ✓✓ Correct answer balance sheets etc.
,7. Guidelines for business plan ✓✓ Correct answer - make sure assumptions are realistic
- keep language simple
- cover the risks and opportunities
- analyze your competition
8. benefits of business plan ✓✓ Correct answer - used as a planning and bench marking tool
- sometimes required by bank loan oflcers
9. Sole Proprietorships ✓✓ Correct answer - many businesses begin as this
- simplest ownership form to set up
- you are the sole owner of the company
- exposes you to unlimited liability for the business debt
- not good if you are running a significant business
- terminated upon owners death
- you own the assets of the company so if you sell you are selling the assets of the company
- you bear personal liability for all actions undertaken in the name of the business
- do not pay corporate tax income; your net income from the business is reported as ordinary income
- business and personal expenses must be kept separate
10. advantages of sole proprietorship ✓✓ Correct answer - minimal legal restrictions
- simple ownership form
- low start up costs
- sole ownership of profits
- freedom in decision making process
11. disadvantages of a sole proprietorship ✓✓ Correct answer - unlimited personal liability
- less available capital
- diflculty in obtaining long term financing
, - dissolution of the business in the event of owners death
12. partnership ✓✓ Correct answer relationship between two or more persons who join to carry on a trade or business
- each person contributes money, property, labor, or skills
- two types ✓✓ Correct answer general and limited partnerships
13. general partnerships ✓✓ Correct answer can be formed through oral agreement
- own the assets of the company just like a sole proprietorship
- have personal and unlimited liability
- each partner is responsible for the acts of other partners when they act in the name of the business
14. limited partnership ✓✓ Correct answer one or more general partners and one or more limited partners
- limited liability in the company; no personal liability
- liable only for the previously agreed upon contribution or investment to the business
15. what happens if a general partner dies? ✓✓ Correct answer the partnership dissolves and the assets of the partnership must be sold or
distributed to first pay the creditors and then the partners
