Business 101 Exam #2
business - ANS-profit-seeking enterprises or activities that provide goods and services.
They are established to serve the needs of cusomers and the ownders seek to make
profits
profit - ANS-rewards for taking risks. This is the net income and is what the owners get
to keep after subtracting all costs to run the business. Also known as "the bottom line"
revenue - ANS-sales or what the customers pay you when they buy a good or service.
Also known as "the top line"
a business has to do well to do ___? - ANS-good
without profit, businesses cannot... - ANS-businesses cannot do these things without
what?
-provide jobs for people
-pay taxes to the community
-do other socially desireable things
-survive in a very competitive global economy
Principal/ Agent relationship in the legal section is also called a ___. - ANS-a fiduciary
relationship is also known as what?
Friedman's arguement - ANS-stockholders (principals) are the only ones that corporate
officers (agents) should work for. Also thinks that profit maximization is the key concept
sole proprietorship - ANS-majority of businesses are owned this way but have the
lowest percent of sales
partnership - ANS-minority of businesses are owned this way but have median sales
corporation - ANS-average number of businesses are ownded this way but have the
majority of sales
example of a sole proprietorship - ANS-ma and pap shop is an example of what type of
ownership
, example of a partnership - ANS-law firm, accounting firm, medical practices... implies 2
or more owners are examples of what type of ownership
example of a corporation - ANS-walmart is an example of what type of ownership
what kind of corporation is the most common - ANS-public is the most common kind of
what
greatest disadvantage in a partnership according to prof. leonard - ANS-potential for
disagreement
when are companies taxed twice? - ANS-when dividends are given, companies are
what?
dividends - ANS-a part of profit which have to be reported on the recievers tax returns
sole proprietorships - ANS-the simplest form of business
advantages to sole proprietorships - ANS-these are all example of what?
-easy to start (flexibility)
-simple tax rules: business income= personal income
disadvantages to sole proprietorships - ANS-these are all example of what?
-unlimited liability (responsible for all debts)
-limited resources available (financial support and human resources)
-limited growth potential
advantages to partnerships - ANS-these are all example of what?
-more resources available (financial and talent)
-can share the load
-longer survival (in case of departure of one person)
-no special taxes
disadvantages of partnerships - ANS-these are all example of what?
-unlimited liability in some forms
-division of profit
-potential for disagreements
-exit conditions must be spelled out in an agreement
business - ANS-profit-seeking enterprises or activities that provide goods and services.
They are established to serve the needs of cusomers and the ownders seek to make
profits
profit - ANS-rewards for taking risks. This is the net income and is what the owners get
to keep after subtracting all costs to run the business. Also known as "the bottom line"
revenue - ANS-sales or what the customers pay you when they buy a good or service.
Also known as "the top line"
a business has to do well to do ___? - ANS-good
without profit, businesses cannot... - ANS-businesses cannot do these things without
what?
-provide jobs for people
-pay taxes to the community
-do other socially desireable things
-survive in a very competitive global economy
Principal/ Agent relationship in the legal section is also called a ___. - ANS-a fiduciary
relationship is also known as what?
Friedman's arguement - ANS-stockholders (principals) are the only ones that corporate
officers (agents) should work for. Also thinks that profit maximization is the key concept
sole proprietorship - ANS-majority of businesses are owned this way but have the
lowest percent of sales
partnership - ANS-minority of businesses are owned this way but have median sales
corporation - ANS-average number of businesses are ownded this way but have the
majority of sales
example of a sole proprietorship - ANS-ma and pap shop is an example of what type of
ownership
, example of a partnership - ANS-law firm, accounting firm, medical practices... implies 2
or more owners are examples of what type of ownership
example of a corporation - ANS-walmart is an example of what type of ownership
what kind of corporation is the most common - ANS-public is the most common kind of
what
greatest disadvantage in a partnership according to prof. leonard - ANS-potential for
disagreement
when are companies taxed twice? - ANS-when dividends are given, companies are
what?
dividends - ANS-a part of profit which have to be reported on the recievers tax returns
sole proprietorships - ANS-the simplest form of business
advantages to sole proprietorships - ANS-these are all example of what?
-easy to start (flexibility)
-simple tax rules: business income= personal income
disadvantages to sole proprietorships - ANS-these are all example of what?
-unlimited liability (responsible for all debts)
-limited resources available (financial support and human resources)
-limited growth potential
advantages to partnerships - ANS-these are all example of what?
-more resources available (financial and talent)
-can share the load
-longer survival (in case of departure of one person)
-no special taxes
disadvantages of partnerships - ANS-these are all example of what?
-unlimited liability in some forms
-division of profit
-potential for disagreements
-exit conditions must be spelled out in an agreement
