TN Business and Law Exam Questions With
Correct Answers
Success |Factors |in |Your |Business |- |CORRECT |ANSWER✔✔-organized, |consistent |approach
Factors |in |Business |Failure |- |CORRECT |ANSWER✔✔-poor |planning |and |inadequate |
management
Entrepreneur |- |CORRECT |ANSWER✔✔-a |person |engaged |in |strategic |activities |that |involve |
initiation |and |development |of |a |new |business
Calculated |Risk |- |CORRECT |ANSWER✔✔-something |that |is |well |thought |through |where |all |
outcomes |are |considered
Rewards |of |Owning |Your |Own |Business |- |CORRECT |ANSWER✔✔-own |boss, |flexible |time, |
freedom |and |independence, |personal |satisfaction
Challenges |of |Owning |Business |- |CORRECT |ANSWER✔✔-long |hours, |manage |cash |flow, |payroll,
|overwhelming |responsibility, |finding/keeping |employees, |taxes, |government |regulations
Business |Plan |- |CORRECT |ANSWER✔✔-a |document |that |outlines |business |strategies |and |goals
Key |Functions |of |a |Business |Plan |- |CORRECT |ANSWER✔✔-planning |tool, |loan |or |investor |
document, |benchmarking |tool
Element |of |a |Business |Plan |- |CORRECT |ANSWER✔✔-cover |page, |executive |summary, |company |
summary, |products |and |services, |market |analysis, |market |strategy, |financial |plan
,What |could |be |a |pitfall |to |a |business |plan? |- |CORRECT |ANSWER✔✔-must |portray |an |accurate |
picture |of |business
What |are |the |different |types |of |business |structures? |- |CORRECT |ANSWER✔✔-sole |
proprietorship, |partnership, |c |corporation, |s |corporation, |limited |liability |company
Sole |Proprietorship |- |CORRECT |ANSWER✔✔-a |business |that |has |one |individual |as |the |owner |
who |is |responsible |for |100% |of |the |decisions |made |on |behalf |of |the |business |and |owns |all |of |
the |business |assets
Advantages |of |a |Sole |Proprietorship |- |CORRECT |ANSWER✔✔-minimal |legal |restrictions, |simple
|ownership |form, |low |startup |cost, |sole |owner |of |profits, |freedom |in |decision |making
Disadvantages |to |a |Sole |Proprietorship |- |CORRECT |ANSWER✔✔-unlimited |liability, |less |
available |capital, |possible |difficulty |in |obtaining |long |term |financing, |dissolution |of |the |
business |in |even |of |owner |death
Partnership |- |CORRECT |ANSWER✔✔-a |business |relationship |between |two |or |more |persons |
who |join |to |carry |on |a |trade |or |business. |each |person |contributes |money, |property, |labor, |or |
skill, |and |each |partner |expects |to |share |in |the |profits |and |losses |of |the |business.
Two |types |of |partnership |- |CORRECT |ANSWER✔✔-general |and |limited
Advantages |of |a |General |Partnership |- |CORRECT |ANSWER✔✔-ease |of |formation, |direct |profit |
rewards, |larger |management |base |than |that |of |a |sole |proprietorship
Disadvantages |to |a |General |Partnership |- |CORRECT |ANSWER✔✔-unlimited |liability, |potential |
for |disagreements, |lack |of |continuity, |difficulty |in |withdrawing |from |a |partnership
, C |Corporation |- |CORRECT |ANSWER✔✔-a |legal |business |entity |that |has |independent |ownership
|of |assets |and |liabilities |from |its |shareholders
Requirements |of |C |Corporation |- |CORRECT |ANSWER✔✔-board |of |directors |and |corporate |
officers, |stockholders |as |owner |of |the |company, |board |meetings, |board |empowered |to |
authorize |certain |actions
Advantages |of |a |C |Corporation |- |CORRECT |ANSWER✔✔-separate |legal |entity, |limited |liability |
for |stockholders, |unlimited |life |of |the |business, |availability |of |capital |resources, |transfer |of |
ownership |though |stock
Disadvantages |to |a |C |Corporation |- |CORRECT |ANSWER✔✔-complex |and |expensive |
organization, |limitations |on |corporations |activities |and |decisions |by |the |corporate |charter, |
extensive |record |keeping |and |regulation, |double |taxation
S |Corporation |- |CORRECT |ANSWER✔✔-a |legal |business |entity |formed |under |the |rules |of |
Subchapter |S |of |the |Internal |Revenue |Code. |It |is |taxed |like |a |partnership |by |passing |items |of |
income, |loss, |deduction, |and |credits |through |to |its |shareholders |to |be |included |on |their |
separate |returns
Requirements |for |S |Corporation |- |CORRECT |ANSWER✔✔-one |class |of |stock, |no |more |than |100
|shareholders |who |are |citizens |or |legal |residents |of |US, |filing |of |IRS |Form |2553
Limited |Liability |Company |(LLC) |- |CORRECT |ANSWER✔✔-a |legal |business |entity |that |has |
characteristics |of |both |sole |proprietorships |and |corporations. |Federal |income |taxes |are |paid |
only |on |income |distributed |to |members |as |ordinary |income. |Member |have |protection |from |
liability |for |actions |taken |by |the |company |or |by |other |members |of |your |company |but |are |not |
protected |from |liability |for |personal |actions.
Advantages |of |a |LLC |- |CORRECT |ANSWER✔✔-limited |disclosure |of |owners, |limited |
documentation, |no |advance |IRS |filings, |no |public |disclosure |of |finances, |limited |liability |for |
managers |and |members, |ability |to |delegate |management |to |non |members
Correct Answers
Success |Factors |in |Your |Business |- |CORRECT |ANSWER✔✔-organized, |consistent |approach
Factors |in |Business |Failure |- |CORRECT |ANSWER✔✔-poor |planning |and |inadequate |
management
Entrepreneur |- |CORRECT |ANSWER✔✔-a |person |engaged |in |strategic |activities |that |involve |
initiation |and |development |of |a |new |business
Calculated |Risk |- |CORRECT |ANSWER✔✔-something |that |is |well |thought |through |where |all |
outcomes |are |considered
Rewards |of |Owning |Your |Own |Business |- |CORRECT |ANSWER✔✔-own |boss, |flexible |time, |
freedom |and |independence, |personal |satisfaction
Challenges |of |Owning |Business |- |CORRECT |ANSWER✔✔-long |hours, |manage |cash |flow, |payroll,
|overwhelming |responsibility, |finding/keeping |employees, |taxes, |government |regulations
Business |Plan |- |CORRECT |ANSWER✔✔-a |document |that |outlines |business |strategies |and |goals
Key |Functions |of |a |Business |Plan |- |CORRECT |ANSWER✔✔-planning |tool, |loan |or |investor |
document, |benchmarking |tool
Element |of |a |Business |Plan |- |CORRECT |ANSWER✔✔-cover |page, |executive |summary, |company |
summary, |products |and |services, |market |analysis, |market |strategy, |financial |plan
,What |could |be |a |pitfall |to |a |business |plan? |- |CORRECT |ANSWER✔✔-must |portray |an |accurate |
picture |of |business
What |are |the |different |types |of |business |structures? |- |CORRECT |ANSWER✔✔-sole |
proprietorship, |partnership, |c |corporation, |s |corporation, |limited |liability |company
Sole |Proprietorship |- |CORRECT |ANSWER✔✔-a |business |that |has |one |individual |as |the |owner |
who |is |responsible |for |100% |of |the |decisions |made |on |behalf |of |the |business |and |owns |all |of |
the |business |assets
Advantages |of |a |Sole |Proprietorship |- |CORRECT |ANSWER✔✔-minimal |legal |restrictions, |simple
|ownership |form, |low |startup |cost, |sole |owner |of |profits, |freedom |in |decision |making
Disadvantages |to |a |Sole |Proprietorship |- |CORRECT |ANSWER✔✔-unlimited |liability, |less |
available |capital, |possible |difficulty |in |obtaining |long |term |financing, |dissolution |of |the |
business |in |even |of |owner |death
Partnership |- |CORRECT |ANSWER✔✔-a |business |relationship |between |two |or |more |persons |
who |join |to |carry |on |a |trade |or |business. |each |person |contributes |money, |property, |labor, |or |
skill, |and |each |partner |expects |to |share |in |the |profits |and |losses |of |the |business.
Two |types |of |partnership |- |CORRECT |ANSWER✔✔-general |and |limited
Advantages |of |a |General |Partnership |- |CORRECT |ANSWER✔✔-ease |of |formation, |direct |profit |
rewards, |larger |management |base |than |that |of |a |sole |proprietorship
Disadvantages |to |a |General |Partnership |- |CORRECT |ANSWER✔✔-unlimited |liability, |potential |
for |disagreements, |lack |of |continuity, |difficulty |in |withdrawing |from |a |partnership
, C |Corporation |- |CORRECT |ANSWER✔✔-a |legal |business |entity |that |has |independent |ownership
|of |assets |and |liabilities |from |its |shareholders
Requirements |of |C |Corporation |- |CORRECT |ANSWER✔✔-board |of |directors |and |corporate |
officers, |stockholders |as |owner |of |the |company, |board |meetings, |board |empowered |to |
authorize |certain |actions
Advantages |of |a |C |Corporation |- |CORRECT |ANSWER✔✔-separate |legal |entity, |limited |liability |
for |stockholders, |unlimited |life |of |the |business, |availability |of |capital |resources, |transfer |of |
ownership |though |stock
Disadvantages |to |a |C |Corporation |- |CORRECT |ANSWER✔✔-complex |and |expensive |
organization, |limitations |on |corporations |activities |and |decisions |by |the |corporate |charter, |
extensive |record |keeping |and |regulation, |double |taxation
S |Corporation |- |CORRECT |ANSWER✔✔-a |legal |business |entity |formed |under |the |rules |of |
Subchapter |S |of |the |Internal |Revenue |Code. |It |is |taxed |like |a |partnership |by |passing |items |of |
income, |loss, |deduction, |and |credits |through |to |its |shareholders |to |be |included |on |their |
separate |returns
Requirements |for |S |Corporation |- |CORRECT |ANSWER✔✔-one |class |of |stock, |no |more |than |100
|shareholders |who |are |citizens |or |legal |residents |of |US, |filing |of |IRS |Form |2553
Limited |Liability |Company |(LLC) |- |CORRECT |ANSWER✔✔-a |legal |business |entity |that |has |
characteristics |of |both |sole |proprietorships |and |corporations. |Federal |income |taxes |are |paid |
only |on |income |distributed |to |members |as |ordinary |income. |Member |have |protection |from |
liability |for |actions |taken |by |the |company |or |by |other |members |of |your |company |but |are |not |
protected |from |liability |for |personal |actions.
Advantages |of |a |LLC |- |CORRECT |ANSWER✔✔-limited |disclosure |of |owners, |limited |
documentation, |no |advance |IRS |filings, |no |public |disclosure |of |finances, |limited |liability |for |
managers |and |members, |ability |to |delegate |management |to |non |members
