Business Essentials and Legal Liabilities Quiz
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Questions and Answers

Which of the following best describes business?

  • The practice of making one's living (correct)
  • The practice of buying and selling products
  • The practice of making money
  • The practice of producing goods and services

    • What does it mean for a business to have a separate legal entity?

  • The business is not subject to taxation
  • The business owner is not liable for any debts
  • The business owner is responsible for all debts
  • The business has limited liability for its owners (correct)

    • What happens if a business acquires debts?

  • The owner is not liable for the debts
  • The debts are automatically forgiven
  • The creditors can go after the owner's personal possessions (correct)
  • The business is not responsible for the debts

    • How are businesses taxed in comparison to corporations?

    <p>Businesses have higher tax rates than corporations</p> Signup and view all the answers

    Which of the following best describes business?

    <p>The practice of making a living</p> Signup and view all the answers

    What is a common colloquial usage of the term 'business'?

    <p>Referring to a company</p> Signup and view all the answers

    What is the liability of the owner in a business entity?

    <p>The owner is responsible and liable for debts incurred by the business</p> Signup and view all the answers

    How are businesses taxed in comparison to corporations?

    <p>Businesses are not subject to corporate tax rates</p> Signup and view all the answers

    What does it mean for a business to have limited liability?

    <p>The owner is only liable for debts incurred by the business if they have a separate legal entity</p> Signup and view all the answers

    What is a common colloquial usage of the term 'business'?

    <p>Referring to a company</p> Signup and view all the answers

    What is a sole proprietorship also known as?

    <p>Sole tradership</p> Signup and view all the answers

    What is the legal distinction between the owner and the business entity in a sole proprietorship?

    <p>There is no legal distinction</p> Signup and view all the answers

    Who receives all profits in a sole proprietorship?

    <p>The sole trader</p> Signup and view all the answers

    What is the liability of the owner in a sole proprietorship?

    <p>Unlimited responsibility for all losses and debts</p> Signup and view all the answers

    Can a sole proprietorship use a trade name or business name different from the owner's legal name?

    <p>Yes, they may use a trade name</p> Signup and view all the answers

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