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CCHS Econ. Test 3
About Business Types, Chapter 3
| Question | Answer |
|---|---|
| What are the three business types? | The three business types are: 1. Sole Proprietorship 2. Partnership 3. Corporation |
| Which business type has 1 owner? | Sole Proprietorship |
| Which business type has 2 or more owners? | Partnership (General or Limited) |
| Which business type has multiple owners, to include stockholders and shareholders. | A Corporation |
| Which is the hardest business type to start up? Which is the easiest business type to start up? | A Corporation is the hardest business type to start up. A sole proprietorship is the easiest business type to start up. |
| Which business type requires "articles of partnership"? | A Partnership requires "articles of partnership"? |
| These two business types have a "limited life" because when the business owner(s) no longer own(s) the business or deceases, the business no longer exists | 1. Sole Proprietorship 2. Partnership |
| This type of business has an "unlimited life" because even if the CEO/President of the company deceases or resigns, there are still stockholders/shareholders and a CEO to replace the position | Corporation |
| Describe taxation for the business type, "sole proprietor"? | For a sole proprietor, the owner of the business is taxed (single taxation) |
| Describe taxation for the business type, "partnership"? | Taxation for a partnership is single taxation |
| Describe taxation for the business type, "corporation"? | In a corporation, the stockholders/shareholders are taxed. |
| Which business type requires a "charter"? | A corporation |
| This business type makes up about 80% of businesses (Hint: Easiest to start up) | "Sole Proprietorship" |
| This business type has the potential to make the most money and generates about 80% of the money earned by businesses. | A corporation is the business type that has the potential to make the most money because of the amount of stockholders. |
| What is the difference between a general partnership and a limited partnership? (Hint: Think about liability for each) | A general partnership has unlimited liability, whereas a limited partnership has limited liability. Those who invest more into the company are more liable. |
| How does one know when a business has made a profit? | A business has made a profit when 'one gets out more than he/she put into the business.' Revenue is greater than expenses. |
| Define "business expenses." | "Business expenses" are the money that is 'put in' to start a business. |
| Define "gross revenue/receipts." | "Gross revenue/receipts" is the money that the business owner makes, before business expenses are taken out. |
| How can one determine the amount of profit by using BUSINESS EXPENSES and GROSS REVENUE/RECEIPTS. | Profit=Gross Revenue-Business Expenses |
| What is a non-profit organization? Give examples. | A non-profit organization is an organization that does not make a profit. For a non-profit, GROSS REVENUE--EXPENSES=$0. (Examples: Humane Society, Goodwill, Habitat for Humanity) |
| What are the two unusual organizations that are considered non-profit organizations? | 1. a credit union 2. The government |
| Are banks 'for profit'? | Yes, banks are for profit. (Credit Unions are not for profit). |
| What is the difference between "interest charged" and "interest earned"? | "Interest charged" is the amount that is charged by a bank or credit union when one borrows money. "Interest earned" is the amount that is earned by a person who puts his or her money in savings at a bank or credit union. |
| Does the customer or the bank/credit union receive "interest charged"? | The bank/credit union receives "interest charged." The customer is the one that is charged. |
| Does the customer or the bank/credit union receive "interest earned"? | The customer receives "interest earned" because he or she has his or her money in savings. |
| What is the largest non-profit organization? | The largest non-profit organization is the government. |
| Which business type needs "articles of partnership" and which business type needs a "charter"? | A partnership is the business type that needs "articles of partnership," whereas a corporation needs a "charter." |
| Rank the 3 business types in order from hardest to easiest to start up. | Hardest: Corporation Next Hardest: Partnership Easiest: Sole Proprietorship |
Created by:
khanchett
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