Business Organization Assessment

1. A sole proprietorship can best be defined as…

A. one individual in business for him/herself
B. stockholders joined under contract
C. one person owning stock
D. two individuals owning stock

2. Sole priorships make up 72% of all businesses.This is the …

A. least of business organizations in the U.S.
B. second greatest form in the U.S.
C. majority of business organizations in the U.S.
D. All of the above

3. Beauticians, dentists and lawyers are all examples of which type of business
organization?
A. partnership
B. sole proprietorship
C. corporation
D. limited partnership

4. A partnership can best be described as…

A. business operated by 2 or more people
B. business operated by 2 or more stockholders
C. business operated by 2 or more other companies
D. business operated by 1 person

5. Partnerships are the ________common business organization in the U.S.

A. least
B. most
C. abundant
D. none of the above

6. What are the two forms of partnerships?

A. General & Unlimited
B. General & Limitless
C. General & Liable
D. General & Limited
7. In the following situation who has UNLIMITED LIABILITY?
Harold Nodoe, Gloria Poor and Jack Rich owned the
Trio Dress Shoppe as a partnership. Under the terms of
Their partnership agreement, Nodoe and Poor were
entitled each to 40% of the profits, while the remaining
20% went to Rich. Last month the firm collapsed. After
selling off everything it owned, the company still owed
its creditors $10,000. Since Nodoe and Poor had no
assets of their own, the creditors recovered the total
amount owed to them from Jack Rich’s personal bank
account.
A. Harold Nodoe
B. Jack Rich
C. Gloria Poor
D. Mrs. Forbes

8. Which best defines a corporation?

A. a business organization recognized as partnership
B. a business organization recognized as a sole proprietorship
C. a business organization recognized as a separate legal entity
D. a business organization recognized as a franchise

9. What is a stock?
A. certificate of ownership
B. certificate of partnership
C. certificate of friendship
D. certificate of liability

10. Corporations make up ______ of business organizations (which is the

smallest percentage) yet produce ____ of total sales
A. 20%, 90%
B. 90%, 20%
C. 72%, 20%
D. 100%, 1%

11. True or False…A corporation can be sued but the people who own the
corporation (stockholders) cannot be sued.
A. True
B. False
12. In the image above compare the board of directors to a group of leaders in
KY schools.
A. Boards of Directors are like School Teachers
B. Boards of Directors are like Students
C. Boards of Directors are like Citizens
D. Boards of Directors are like School Boards

13. If a company had lonely 200 shares of stock and you bought a share, how
much of the company would you own?
A. 1/200th
B. half
C. All of the company
D. None of the company, stock ownership doesn’t mean ownership in the company

14. What are the two different forms of stock?

A. Common Stock and Limited Stock
B. Uncommon Stock and Preferred Stock
C. Group Stock and Predetermined Stock
D. Common Stock and Preferred Stock
15. Which form of stockholders have voting rights?
A. constant stockholders
B. limited stockholders
C. preferred stockholders
D. none of the above

16. All of the following are advantages of a Sole proprietorship except…

A. Freedom
B. Ease of Formation
C. Low Start-up cost
D. Unlimited Liability

17. Which of following is an advantage of a general partnership?

A. Unlimited liability
B. Lack of Continuity
C. Larger Money Pool
D. Possibility of conflict

I. Limited Liability
II. Continuity
III. Greater likelihood of professional Management
IV. Easier Access to Money
18. All of the above are advantages of which business organization?
A. Corporations
B. Sole Proprietorship
C. Partnerships
D. None of the above

19. Which is a disadvantage of a sole proprietorship?

A. Freedom
B. Ease of Formation
C. Low Start-up Cost
D. Difficulty Raising Money
20. The majority “distribution based on annual sales” for partnerships is…
A. Less than $25,000
B. $1,000,000 or more
C. $50,000 to $99,999
D. $25,000 to $49,999