Business Ethics and Social Responsibility - Grade 12
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Questions and Answers

Which of the following is NOT a characteristic of a corporation?

  • Corporation has complete control of its operations by a single owner. (correct)
  • Corporation typically hires a large workforce.
  • Corporation provides benefits such as connections with suppliers.
  • Corporation can raise significant capital from investors.

Which of the following is an advantage of a sole proprietorship?

  • The sole proprietor can share decision-making with other investors.
  • Tax preparation is generally more straightforward. (correct)
  • The business can easily raise capital from public investors.
  • There is limited liability for the owner.

What is one of the key features of a partnership?

  • Partnerships are only beneficial if there are four or more participants.
  • Partners share profits and liabilities equally regardless of investment.
  • Partnerships require a formal structure similar to corporations.
  • Partnerships allow for unlimited liability among owners. (correct)

What difficulty might a sole proprietor face?

<p>Challenges in securing large amounts of capital. (D)</p> Signup and view all the answers

Which of the following statements about corporations is true?

<p>Corporations can survive beyond the life of its owner. (A)</p> Signup and view all the answers

What is the liability of a shareholder in a corporation?

<p>Limited to the amount of their investment (C)</p> Signup and view all the answers

Which statement is true regarding sole proprietorships?

<p>The owner can single-handedly make decisions (B), The owner has unlimited liability for business debts (C)</p> Signup and view all the answers

Which of the following describes a partnership?

<p>There must be at least two individuals involved (B)</p> Signup and view all the answers

What is a characteristic of corporations compared to sole proprietorships?

<p>More formal structure with distinct legal recognition (A)</p> Signup and view all the answers

Which type of business involves creating products from raw materials?

<p>Manufacturing business (B)</p> Signup and view all the answers

What term describes the difference between income received and expenses spent?

<p>Profit (D)</p> Signup and view all the answers

Which statement about partnerships is accurate?

<p>Partners share management responsibilities informally (C)</p> Signup and view all the answers

What is a significant challenge of a sole proprietorship compared to other business structures?

<p>The owner has to manage all aspects independently (C), Limited ability to raise funds through investment (D)</p> Signup and view all the answers

What is a primary advantage of a corporation?

<p>It can raise substantial amounts of capital by selling shares. (A)</p> Signup and view all the answers

What is a disadvantage of being a corporation?

<p>Income can be taxed twice. (D)</p> Signup and view all the answers

Which statement best describes the structure of a partnership?

<p>The individuals share profits and liabilities. (D)</p> Signup and view all the answers

What is one reason individuals might choose to operate as a sole proprietorship?

<p>It gives complete control over financial and operational matters. (D)</p> Signup and view all the answers

How does liability differ between corporations and sole proprietorships?

<p>Sole proprietors are fully liable for business debts, while shareholders’ liability is limited. (B)</p> Signup and view all the answers

Which of the following best describes the longevity of a corporation?

<p>Corporations can continue indefinitely, even after ownership changes. (A)</p> Signup and view all the answers

What is a significant challenge faced by partnerships compared to corporations?

<p>Partnerships face potential conflicts in decision-making. (B)</p> Signup and view all the answers

What common tax issue do corporations face?

<p>They experience double taxation on corporate income. (C)</p> Signup and view all the answers

What is the primary aim of most businesses?

<p>To earn a profit (A)</p> Signup and view all the answers

Which of the following is NOT a type of business organization aimed at earning profit?

<p>Non-profit organization (A)</p> Signup and view all the answers

Which of the following describes a service business?

<p>A business that organizes events for clients (D)</p> Signup and view all the answers

What is a key disadvantage of a sole proprietorship?

<p>Personal liability for all debts (C)</p> Signup and view all the answers

Which activity does NOT typically belong to the operations of a business?

<p>Investing in real estate (C)</p> Signup and view all the answers

What is one advantage of operating a sole proprietorship?

<p>Fewer government regulations (A)</p> Signup and view all the answers

How do merchandising businesses primarily generate revenue?

<p>By selling products purchased from other businesses (B)</p> Signup and view all the answers

Which of the following is a potential downside of a sole proprietorship compared to other business forms?

<p>Limited access to capital (A)</p> Signup and view all the answers

What is the main characteristic of a corporation?

<p>It has an independent legal status. (B)</p> Signup and view all the answers

Which of the following statements about sole proprietorships is true?

<p>The owner has full control over the business. (C)</p> Signup and view all the answers

Which statement is false regarding partnerships?

<p>Partnerships can raise capital by selling shares. (D)</p> Signup and view all the answers

Which of the following is not an advantage of a partnership?

<p>Limited decision-making power due to more partners. (B)</p> Signup and view all the answers

What best describes the nature of business?

<p>The primary aim of business is to earn profits. (D)</p> Signup and view all the answers

Which of the following terms defines profit?

<p>The amount received minus expenses. (A)</p> Signup and view all the answers

Which statement regarding the liability of shareholders is correct?

<p>Shareholders can lose their investments, but no more. (B)</p> Signup and view all the answers

What is false about the life span of a corporation?

<p>Its life span is always tied to its founders. (A)</p> Signup and view all the answers

What is a primary advantage of operating as a partnership compared to a corporation?

<p>Increased privacy in business dealings (A)</p> Signup and view all the answers

Which of the following statements best describes a disadvantage of partnerships?

<p>The partnership may lack formal legal status. (A)</p> Signup and view all the answers

What can be considered a key benefit of having partners in a business?

<p>Diverse skills and connections contributing to success (D)</p> Signup and view all the answers

An important characteristic of a corporation is that it is:

<p>Independent from its owners legally (B)</p> Signup and view all the answers

Which challenge is often faced by partnerships that may not affect corporations in the same way?

<p>Potential for conflicts among partners (C)</p> Signup and view all the answers

Why might a partnership have a higher capacity for borrowing funds?

<p>More partners mean increased shared wealth (A)</p> Signup and view all the answers

One disadvantage of a partnership is that:

<p>Partners must equally share profits (C)</p> Signup and view all the answers

What unique tax implication applies to profits earned by a partnership?

<p>They are passed onto individual partners as income (B)</p> Signup and view all the answers

Flashcards

Corporation

A separate legal entity distinct from its owners (shareholders).

Shareholder Liability

Limited to the amount invested in the corporation.

Sole Proprietorship

A business owned by one person. The owner has full control but is personally liable for all business debts.

Partnership

A business owned by two or more people. Partners share in the profits and losses.

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Service Business

A business that provides services, not products. Examples: Book stores, restaurants.

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Merchandising Business

A business that buys and sells products. Examples: Stores purchasing clothes.

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Manufacturing Business

A business that turns raw materials into finished goods. Examples: Baked goods, cosmetics.

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Profit

The difference between the amount received and spent in a business transaction.

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Business Organization

A group that combines economic resources to create and sell goods or services.

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Sole Proprietorship Advantage

Simpler taxes, low start-up costs, and easier access to money.

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Sole Proprietorship Disadvantage

Owner is liable for all business debts and financial responsibility is limited.

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What makes a partnership?

A partnership is formed when two or more people agree to share the profits and losses of a business venture. They also share decision-making and responsibilities.

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Partnership Advantages

Partnerships offer benefits such as shared expertise, easier start-up, and potentially more available funding.

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Partnership Disadvantages

Partnerships can be complex, with potential conflicts, and all partners are personally liable for debts.

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What is a Corporation?

A corporation is a legal entity separate from its owners, with its own rights and responsibilities.

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Corporation Advantages

Corporations can raise capital easily and can continue even if ownership changes.

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What is a Business Partnership?

A business partnership is a formal agreement between two or more individuals to share the profits and losses of a business venture. They collaborate on key decisions like managing capital and developing strategies.

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What is the difference between a partnership and a corporation?

A partnership is a legal arrangement between individuals, while a corporation is a separate legal entity with its own rights and responsibilities, not directly tied to the owners.

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What sets a corporation apart?

Corporations have the ability to raise capital through stock sales, making them powerful entities that can expand and grow easily. They also have the benefit of limited liability for their shareholders.

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Corporation's Separate Entity

A corporation is legally distinct from its owners, meaning it can sue and be sued, own assets, and enter into contracts independently.

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Limited Liability

Shareholders in a corporation are only liable for the amount they invested; their personal assets are protected.

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Corporation's Legal Status

A corporation is a separate entity, independent of its owners. It can own property, enter contracts, and be sued.

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Double Taxation

Corporations pay taxes on their income, and shareholders pay taxes on dividends, resulting in profits being taxed twice.

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Sole Proprietorship Tax

Taxes are simpler for sole proprietorships because the owner's personal income and business income are combined.

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Ownership Transfer

Shares in a corporation can be easily bought and sold, allowing ownership to change hands without disrupting the business.

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Partnership's Shared Liability

Partners share both the profits and the liabilities of the business.

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Business: Passive or Active?

Business is an active process. It involves ongoing decisions, actions, and operations.

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Partnership's Funding

Partnerships typically raise funds through personal investments, loans, or profit sharing, not by selling stock.

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Fundraising Advantages

Corporations can raise large sums of money by selling shares or issuing bonds.

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Sole Proprietorship's Unlimited Liability

The owner of a sole proprietorship is personally responsible for all business debts.

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Sole Proprietorship's Easy Setup

Starting a sole proprietorship is typically easier and less expensive than setting up a corporation or partnership.

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Corporation Definition

A corporation is a business structure owned by multiple shareholders with limited liability and a separate legal identity.

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Sole Proprietorship: One Person?

A sole proprietorship is owned and managed by one person, who is also personally liable for all debts.

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Partnership: Sharing Decisions

Partnerships involve two or more people who share the business's profits, losses, and management responsibilities.

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Corporation Role

Corporations play a vital role in the economy by creating goods and services, employing workers, and generating wealth.

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Business Benefit Society?

Businesses contribute to society by providing goods and services people need, creating jobs, and boosting the economy.

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Study Notes

Business Ethics and Social Responsibility - Grade 12

  • Quarter 3, Module 1: The Nature and Forms of Business Organizations
  • This module covers business ethics and social responsibility, focusing on the nature and various forms of business organizations.
  • It aims to help students understand the different types of business organizations, their advantages and disadvantages, and the reasons people engage in business.

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Business Ethics and Social Responsibility PDF

Description

This quiz explores the nature and forms of business organizations as discussed in Quarter 3, Module 1 for Grade 12. Students will learn about business ethics, social responsibility, and the advantages and disadvantages of different types of business organizations. Prepare to deepen your understanding of why individuals engage in various business forms.

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