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Types of Business Ownership
Chapter 6 Exam Review Types of Business Ownership True or False
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A disadvantage of having a partner is if you do not get along with one another.
TRUE
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A non profit organization will have to pay taxes if they earn over one million dollars.
FALSE
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An intermediary is a business that moves goods from one business to another.
TRUE
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A business owned by one person is a corporation.
FALSE
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A hair salon is a service business.
TRUE
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When groups of businesses, such as small farms, pool their resources, they form a non profit organization. FALSE - cooperative
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A franchise makes a contractual agreement to use the name and sell the products or services of a company in a designated geographic area. TRUE
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TRUE – example; Ocean Spray is a cooperative of cranberry growers
Cooperatives are organizations that are owned and operated by its members. TRUE – example; Ocean Spray is a cooperative of cranberry growers
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A retailer purchases goods from a wholesaler and sells them to consumers.
TRUE
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Three primary forms of business ownership are sole proprietorships, partnerships and corporations.
TRUE
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A church and a school are non profit organizations.
TRUE
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A disadvantage of being a sole proprietor is you have unlimited liability.
TRUE
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Processor changes raw materials into more finished products
Processor changes raw materials into more finished products. Example Sugar cane is turned into sugar. TRUE
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Corporations provides a service and do not pay taxes.
FALSE
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The advantages of having a partnership is that it is easier to obtain capital.
TRUE
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Wholesalers will turn raw or processed goods into finished goods.
FALSE - manufacturer
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Service businesses employ about 1/2 of the workforce and are rapidly increasing in numbers.
FALSE – 3/4
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TRUE – also called distributors
A wholesaler distributes goods. TRUE – also called distributors
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Taco Bell is an example of a franchise.
TRUE
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Service businesses perform tasks rather than provide goods.
TRUE
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