BUS 201 - CHAPTER 4 QUESTIONS WITH ACCURATE
ANSWERS
2 types of partnership correct answer General partnership
Limited partnership
A business is considered to be new if
(3 points) correct answer 1. It has been open for under 12 months
2. If it adopts any of the main organization forms
3. If it sells goods or services
Advantages of Franchising correct answer The franchiser can attain rapid growth
for the chain by signing
up many franchisees in many different locations
Advertising money is spent more effciently
A well-advertised brand name comes with the franchise and the franchisee's
outlet is instantly recognizable
Board of directors (definition) correct answer A group of individuals voted by a
firm's shareholders and charged with overseeing, and taking legal responsibility
for the firm's actions
Board of Directors correct answer A group of individual elected by a firm's
shareholders and charged with overseeing, and taking legal responsibility for the
firm's actions
Bootstrapping correct answer Doing more with less
, Business Plan correct answer Document in which the entrepreneur summarizes
her or his business strategy for the proposed new venture and how that strategy
will be implemented
Chief Executive Officer (definition) correct answer The highest-ranking executive
in a company or organization
Chief Executive Officer correct answer The highest-ranking executive in a
company or organization
Co-operative (advantage) correct answer Limited liability of owners and
continuithy
Structure; each member has only one vote in the affairs of the co-op
co-operatives are allowed to
deduct patronage refunds to members out of before-tax income
Co-operative (definition) correct answer An organization that is formed to benefit
its owners in the form of reduced prices and/or the distribution of surpluses at
year-end
Co-operative (disadvantage) correct answer attracting equity investments,
members do not have an incentive to invest in equity capital of the cooperative
democratic voting arrangements and dividends based purely on patronage
discourage some entrepreneurs
from forming or joining a co-operative
ANSWERS
2 types of partnership correct answer General partnership
Limited partnership
A business is considered to be new if
(3 points) correct answer 1. It has been open for under 12 months
2. If it adopts any of the main organization forms
3. If it sells goods or services
Advantages of Franchising correct answer The franchiser can attain rapid growth
for the chain by signing
up many franchisees in many different locations
Advertising money is spent more effciently
A well-advertised brand name comes with the franchise and the franchisee's
outlet is instantly recognizable
Board of directors (definition) correct answer A group of individuals voted by a
firm's shareholders and charged with overseeing, and taking legal responsibility
for the firm's actions
Board of Directors correct answer A group of individual elected by a firm's
shareholders and charged with overseeing, and taking legal responsibility for the
firm's actions
Bootstrapping correct answer Doing more with less
, Business Plan correct answer Document in which the entrepreneur summarizes
her or his business strategy for the proposed new venture and how that strategy
will be implemented
Chief Executive Officer (definition) correct answer The highest-ranking executive
in a company or organization
Chief Executive Officer correct answer The highest-ranking executive in a
company or organization
Co-operative (advantage) correct answer Limited liability of owners and
continuithy
Structure; each member has only one vote in the affairs of the co-op
co-operatives are allowed to
deduct patronage refunds to members out of before-tax income
Co-operative (definition) correct answer An organization that is formed to benefit
its owners in the form of reduced prices and/or the distribution of surpluses at
year-end
Co-operative (disadvantage) correct answer attracting equity investments,
members do not have an incentive to invest in equity capital of the cooperative
democratic voting arrangements and dividends based purely on patronage
discourage some entrepreneurs
from forming or joining a co-operative
