05 Key
1. (p.b114)b Thebcorporationbisbthebmostbcommonbformbofbbusinessbownership.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#1
Topic:bBasicbFormsbofbBusinessbOwnership
2. (p.b114)b ThebthreebmajorbformsbofbbusinessbownershipbinbthebU.S.barebsolebproprietorships,bpartnerships,bandbc
orporations.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#2
Topic:bBasicbFormsbofbBusinessbOwnership
3. (p.b114)b Fewbpeoplebtodaybstartbtheirbownbbusiness.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#3
Topic:bBasicbFormsbofbBusinessbOwnership
1
,4. (p.b115)b Oncebabbusinessbisbestablished,bit'sbalmostbimpossiblebtobchangebfrombonebformbofbbusinessbownershipbtoba
nother.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#4
Topic:bBasicbFormsbofbBusinessbOwnership
5. (p.b114)b Whenbtwoborbmorebpeopleblegallybagreebtobbecomebco-
ownersbofbabbusiness,bthebformbofbbusinessbisbcalledbabpartnership.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#5
Topic:bBasicbFormsbofbBusinessbOwnership
6. (p.b114)b Ablegalbentitybwithbauthoritybtobactbandbhavebliabilitybseparatebfrombitsbownersbisbcalledbabpartnership.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#6
Topic:bBasicbFormsbofbBusinessbOwnership
7. (p.b114)b Corporationsbrepresentb20bpercentbofballbthebbusinessesbinbthebU.S.bandbearnb81bpercentbofbthebtotalbU.S.bb
usinessbreceipts.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#7
Topic:bBasicbFormsbofbBusinessbOwnership
2
,8. (p.b114)b Abcomparisonbofbthebthreebmajorbformsbofbbusinessbownershipbshowsbthatbsolebproprietorshipsbareb
usuallybthebmostbdifficultbtypebofbbusinessbtobestablish.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#8
Topic:bBasicbFormsbofbBusinessbOwnership
9. (p.b115)b Thebfirstbstepbinbstartingbabsolebproprietorshipbisbtobfillboutbabproprietorshipbcharterbapplicationbformbandbfi
lebitbwithbthebstatebgovernment.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#9
Topic:bSolebProprietorship
10. (p.b115)b Itbisbusuallybeasybtobstartbandbendbabsolebproprietorship.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#10
Topic:bSolebProprietorship
11. (p.b115)b Thebprofitsbofbabsolebproprietorshipbarebtaxedbasbthebpersonalbincomebofbthebowner.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#11
Topic:bSolebProprietorship
3
, 12. (p.b115)b Thebsolebproprietorshipbformbofbownershipbtendsbtobbebattractivebtobpeoplebwhobwantbtobinvestbinbabc
ompanybwithoutbtakingbanbactivebrolebinbmanagement.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#12
Topic:bSolebProprietorship
13. (p.b115)b Abmajorbadvantagebofbsolebproprietorshipsbisbthatbanbownerbhasblimitedbliabilitybforbthebdebtsbofbhisborbh
erbbusiness.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#13
Topic:bSolebProprietorship
14. (p.b115)b Onebofbthebstrengthsbofbthebsolebproprietorshipbisbitsbabilitybtobsustainbrapidbgrowthbbybraisingblargeba
mountsbofbfinancialbresources.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#14
Topic:bSolebProprietorship
15. (p.b116)b Thebdebtsbofbabbusinessboperatedbasbabsolebproprietorshipbarebconsideredbtobbebthebpersonalbdebtsbofbthebo
wnerbofbthebbusiness.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#15
Topic:bSolebProprietorship
4
1. (p.b114)b Thebcorporationbisbthebmostbcommonbformbofbbusinessbownership.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#1
Topic:bBasicbFormsbofbBusinessbOwnership
2. (p.b114)b ThebthreebmajorbformsbofbbusinessbownershipbinbthebU.S.barebsolebproprietorships,bpartnerships,bandbc
orporations.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#2
Topic:bBasicbFormsbofbBusinessbOwnership
3. (p.b114)b Fewbpeoplebtodaybstartbtheirbownbbusiness.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#3
Topic:bBasicbFormsbofbBusinessbOwnership
1
,4. (p.b115)b Oncebabbusinessbisbestablished,bit'sbalmostbimpossiblebtobchangebfrombonebformbofbbusinessbownershipbtoba
nother.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#4
Topic:bBasicbFormsbofbBusinessbOwnership
5. (p.b114)b Whenbtwoborbmorebpeopleblegallybagreebtobbecomebco-
ownersbofbabbusiness,bthebformbofbbusinessbisbcalledbabpartnership.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#5
Topic:bBasicbFormsbofbBusinessbOwnership
6. (p.b114)b Ablegalbentitybwithbauthoritybtobactbandbhavebliabilitybseparatebfrombitsbownersbisbcalledbabpartnership.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#6
Topic:bBasicbFormsbofbBusinessbOwnership
7. (p.b114)b Corporationsbrepresentb20bpercentbofballbthebbusinessesbinbthebU.S.bandbearnb81bpercentbofbthebtotalbU.S.bb
usinessbreceipts.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#7
Topic:bBasicbFormsbofbBusinessbOwnership
2
,8. (p.b114)b Abcomparisonbofbthebthreebmajorbformsbofbbusinessbownershipbshowsbthatbsolebproprietorshipsbareb
usuallybthebmostbdifficultbtypebofbbusinessbtobestablish.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#8
Topic:bBasicbFormsbofbBusinessbOwnership
9. (p.b115)b Thebfirstbstepbinbstartingbabsolebproprietorshipbisbtobfillboutbabproprietorshipbcharterbapplicationbformbandbfi
lebitbwithbthebstatebgovernment.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#9
Topic:bSolebProprietorship
10. (p.b115)b Itbisbusuallybeasybtobstartbandbendbabsolebproprietorship.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#10
Topic:bSolebProprietorship
11. (p.b115)b Thebprofitsbofbabsolebproprietorshipbarebtaxedbasbthebpersonalbincomebofbthebowner.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#11
Topic:bSolebProprietorship
3
, 12. (p.b115)b Thebsolebproprietorshipbformbofbownershipbtendsbtobbebattractivebtobpeoplebwhobwantbtobinvestbinbabc
ompanybwithoutbtakingbanbactivebrolebinbmanagement.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#12
Topic:bSolebProprietorship
13. (p.b115)b Abmajorbadvantagebofbsolebproprietorshipsbisbthatbanbownerbhasblimitedbliabilitybforbthebdebtsbofbhisborbh
erbbusiness.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#13
Topic:bSolebProprietorship
14. (p.b115)b Onebofbthebstrengthsbofbthebsolebproprietorshipbisbitsbabilitybtobsustainbrapidbgrowthbbybraisingblargeba
mountsbofbfinancialbresources.
FALSE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#14
Topic:bSolebProprietorship
15. (p.b116)b Thebdebtsbofbabbusinessboperatedbasbabsolebproprietorshipbarebconsideredbtobbebthebpersonalbdebtsbofbthebo
wnerbofbthebbusiness.
TRUE
AACSB:bReflectivebThinking
b Blooms:bKnowledgeb Lear
ningbGoal:b05-1
LevelbofbLearningb1:bKnowledgebofbkeybtermsb Nic
kelsb-bChapterb05b#15
Topic:bSolebProprietorship
4