AnswersRAIL NCAA OC Economics 2027Business Structures

Business Structures Answers

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1
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Which document determines the number of shares in a company?

A
a stock prospectus
B
an annual bill of rights
C
a corporate charter
D
an annual report
2
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feestaxesinsuranceinterest

A
fees
B
taxes
C
insurance
D
interest
3

An entrepreneur who opens a franchise must

A
assume debts.
B
keep profits.
C
offer training.
D
select sites.
4

How do corporations raise money and resources to expand? Select THREE answers.They request a bank loan.They raise franchise fees.They cash in dividends.They agree to sell stocks.They issue bonds.

T
They request a bank loan.
T
They raise franchise fees.
T
They cash in dividends.
T
They agree to sell stocks.
T
They issue bonds.
5

What role does a fast-food corporation play when it agrees to franchise its business? Select four answers.supply traininglicense a trademarkselect a locationpay associated feessupply advertisingcollect most profits

A
supply training
B
license a trademark
C
select a location
D
pay associated fees
E
supply advertising
F
collect most profits
6

A disadvantage of forming a partnership is that owners

A
can find it tougher to start and stop a business.
B
can find it more difficult to get a bank loan.
C
are only responsible for their own finances.
D
are fully responsible for their partners' losses.
7

Which best describes the difference between sole proprietorships and partnerships?

A
Sole proprietors keep all profits and have unlimited liability, while partners split profits and share liabilities.
B
Sole proprietors share responsibilities, while partners are responsible for only a portion of the business.
C
Sole proprietors split profits and share liabilities, while partners keep all profits and have unlimited liability.
D
Sole proprietors pay taxes only on business profits, while partners do not have to pay taxes on profits.
8

Entrepreneurs who want to open a franchise

b
buys the rights from the parent company and creates his or her own rules.
b
buy the rights from the parent company and invest in a location approved by the parent company.
i
invest in a location and create a business model for the franchise.
i
invest in a location and develop a trademark for the franchise.
9

What happens to earnings in a cooperative?

T
They are used to pay middlemen for services.
T
They are shared with member owners.
T
They are used to buy more stock for members.
T
They are shared with customers through dividends.
10

Franchising is typically done by

A
cooperatives.
B
partnerships.
C
LLC
D
corporations.
11

Franchises are attractive to business owners because

A
they have a proven business model.
B
they are typically inexpensive to buy.
C
they get to keep all profits.
D
they come with very little risk.
12

The main advantage that corporations have is

A
limiting liability for owners and stockholders.
B
giving many owners a say in business decisions.
C
being inexpensive and easy to establish.
D
requiring fewer state and federal regulations.
13

An entrepreneur who opens a franchise must

A
assume debts.
B
keep profits.
C
offer training.
D
select sites.
14

Which are examples of sole proprietorships? Check all that apply.

A
lawyers working for a corporation
B
doctors in a partnership
C
independent workers
D
franchise restaurants in a partnership
E
tax preparer working his own business
F
freelance writers
15

Cooperatives save members money by

A
purchasing supplies and services as a group.
B
securing financing from banks as a group.
C
charging more to sell their products as a group.
D
sharing all profits democratically as a group.
16

Which best describes the difference between preferred and common stocks?

A
Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights.
B
Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights.
C
Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends.
D
Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.
17

How do corporations raise money and resources to expand? Select THREE answers.

A
They request a bank loan.
B
They raise franchise fees.
C
They cash in dividends.
D
They agree to sell stocks.
E
They issue bonds.
18

Which document determines the number of shares in a company?

A
a stock prospectus
B
an annual bill of rights
C
a corporate charter
D
an annual report
19

A disadvantage of forming a partnership is that owners

A
can find it tougher to start and stop a business.
B
can find it more difficult to get a bank loan.
C
are only responsible for their own finances.
D
are fully responsible for their partners' losses.

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