BUSI 1301 EXAM 2 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
Question:
1. Sole Proprietorship
Answer:
A business owned, and usually managed, by one person
Question:
2. Partnership
Answer:
Two or more people legally agree to become co-owners of a business.
Question:
3. Corporation
Answer:
A legal entity with authority to act and have liability apart from its owners.
Question:
4. Major Benefits of Sole Proprietorship
Answer:
1)Ease of starting and ending the business
2)Being your own boss
3)Pride of ownership
4)Leaving a legacy
5)Retention of company profit
6)No special taxes
Question:
5. Unlimited Liability
Answer:
Any debts or damages incurred by the business are your debts, even if it means
selling your home, car or anything else
, Question:
6. Disadvantages of Sole Proprietorship
Answer:
1)Unlimited Liability -- Any debts or damages incurred by the business are your
debts, even if it means selling your home, car or anything else.
2)Limited financial resources
3)Management difficulties
4)Overwhelming time commitment
5)Few fringe benefits
6)Limited growth
7)Limited life span
Question:
7. General Partnership
Answer:
All owners share in operating the business and in assuming liability for the
business's debts.
Question:
8. Limited Partnership
Answer:
A partnership with one or more general partners and one or more limited
partners.
Question:
9. General Partner
Answer:
An owner (partner) who has unlimited liability and is active in managing the firm.
Question:
10. Limited Liability
Answer:
that liability for the debts of the business is limited to the amount the limited
partner puts into the company; personal assets are not at risk.
Question:
11. Limited Partner
Answer:
An owner who invests money in the business, but enjoys limited liability.
AND CORRECT ANSWERS
Question:
1. Sole Proprietorship
Answer:
A business owned, and usually managed, by one person
Question:
2. Partnership
Answer:
Two or more people legally agree to become co-owners of a business.
Question:
3. Corporation
Answer:
A legal entity with authority to act and have liability apart from its owners.
Question:
4. Major Benefits of Sole Proprietorship
Answer:
1)Ease of starting and ending the business
2)Being your own boss
3)Pride of ownership
4)Leaving a legacy
5)Retention of company profit
6)No special taxes
Question:
5. Unlimited Liability
Answer:
Any debts or damages incurred by the business are your debts, even if it means
selling your home, car or anything else
, Question:
6. Disadvantages of Sole Proprietorship
Answer:
1)Unlimited Liability -- Any debts or damages incurred by the business are your
debts, even if it means selling your home, car or anything else.
2)Limited financial resources
3)Management difficulties
4)Overwhelming time commitment
5)Few fringe benefits
6)Limited growth
7)Limited life span
Question:
7. General Partnership
Answer:
All owners share in operating the business and in assuming liability for the
business's debts.
Question:
8. Limited Partnership
Answer:
A partnership with one or more general partners and one or more limited
partners.
Question:
9. General Partner
Answer:
An owner (partner) who has unlimited liability and is active in managing the firm.
Question:
10. Limited Liability
Answer:
that liability for the debts of the business is limited to the amount the limited
partner puts into the company; personal assets are not at risk.
Question:
11. Limited Partner
Answer:
An owner who invests money in the business, but enjoys limited liability.
