Business Organization Assessment Quiz

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Questions and Answers

What is an advantage of sole proprietorship?

  • It involves multiple owners
  • Proprietors have complete control over the business (correct)
  • It requires a large initial capital
  • The business structure is complex

What should a business owner carefully assess?

  • The advertising strategies of the business
  • The way the business is formed and structured (correct)
  • The location of the business
  • The employee benefits of the business

What type of companies are typically owned by one person in a hands-on management role?

  • Corporation
  • Sole Proprietorship (correct)
  • Limited Liability Company (LLC)
  • Partnership

What is a disadvantage of sole proprietorship?

<p>Proprietors have unlimited liability (C)</p> Signup and view all the answers

What do sole proprietors own in their business?

<p>The entire business, including all assets and profits (A)</p> Signup and view all the answers

What are assets in the context of business ownership?

<p>Resources with economic value that are owned and controlled by the business owners (B)</p> Signup and view all the answers

What is a potential disadvantage of obtaining additional capital for a partnership?

<p>Low guarantee of profitable returns to lenders (A)</p> Signup and view all the answers

In a general partnership, how are profits and losses typically shared?

<p>Both profits and losses are shared (D)</p> Signup and view all the answers

What is a key characteristic of a limited partnership?

<p>Must have at least two general partners (C)</p> Signup and view all the answers

What does the text identify as an advantage of a corporation?

<p>Wider capital base (A)</p> Signup and view all the answers

Why might highly skilled employees be hesitant to work in a partnership?

<p>Low chance to advance in their careers (C)</p> Signup and view all the answers

What makes expansion easier in a limited partnership?

<p>More people managing different branches (C)</p> Signup and view all the answers

What is a potential disadvantage of partnerships?

<p>Partners are jointly liable for all obligations and effects (A)</p> Signup and view all the answers

What distinguishes a limited partnership from a general partnership?

<p>At least one general partner and one limited partner required (C)</p> Signup and view all the answers

What is one reason why expansion is easier in a limited partnership?

<p>More people involved in managing different branches (C)</p> Signup and view all the answers

Why might obtaining additional capital be difficult for partnerships?

<p>Low guarantee of profitable returns to lenders (D)</p> Signup and view all the answers

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