Business – Chapter 6 – Flashcards
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sole proprietorships
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a business owned by one person
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partnerships
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a business owned by two or more people who share its risks and rewards
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corporations
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a company that is registered by a state and operate apart from its owners
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Give 3 advantages of sole proprietorships
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-easy to do or start -might only need only a license or permit to start -in charge of their own businesses
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Give 3 examples of disadvantages of sole proprietorships
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-no separation between personal and business debts -owner has unlimited liability -the sole proprietorship ends when the owner dies
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define unlimited liability
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responsible for company's debt
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define limited life
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the company ends when the owner dies
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Give 3 advantages of partnerships
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-easy to start -income taxed once -might need only to obtain a license easier for partnerships to obtain capital
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give 3 examples of disadvantages of partnerships
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-all the partners share the business risks -ends if one owner dies (limited life) -may not always get along with partner
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what type of business organization has to obtain corporate from state ,can sell stock to raise money, and company must have board of directors?
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corporations
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give 3 examples of advantages of corporations
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-limited liability -the corporation does not end if an owner dies (unlimited life) -its ability to raise money when people buy stock
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define limited liability
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holds a firm's owners responsible for no more than the capital that they have invested in it
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give 3 examples of disadvantages of corporations
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-they pay taxes on their income -stock holders pay taxes on profits issued them -the government regulates corporations more than other types of business
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define double taxation
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income and stockholders taxed on profits issued to them
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what type of business organization has double taxation
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corporations
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define partnership agreement
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contract that outlines the rights and responsibilities of each person
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Are certain businesses better suited for a certain business type/set-up?
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yes, sole proprietorships are most of all businesses and corporations have the most revenue out of them all
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which type of business has the most number of businesses
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sole proprietorship
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which type of business accounts for the most income
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corporation
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define unlimited life
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when the business owner dies in a sole proprietorship, the business dies
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define limited life
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when a corporation or partnership has an owner that dies and the business doesn't end
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define limited liability
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they are only responsible for the amount of money they invested in the business
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define unlimited liability
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when owner is responsible of the debt of the company unless they pay out of pocket for debt
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if you start a business as one type of business organization, do you have to remain organized that way?
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nope, can move from one to another
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define franchise
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contractual agreement to use the name and sell the products or services of a company in a designated geographic area
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what is an example of a franchise
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taco bell
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you must invest money and pay ________ or a share of profits in return you get a __________ name and business plan
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franchise fees well-known
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define producer
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a business that gather raw goods
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give examples of producers
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agriculture mining fishing forestry
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define processor
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changes raw materials into more finished products
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give examples of processors
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-sugar cane --> sugar -crude oil --> gasoline -iron ore --> steel
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define manufacturer
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a business that makes finished products out of processed goods
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give examples of manufacturers
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-cars -CDs -computers
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define intermediary
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a business that moves goods from one business to another
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give examples of intermediaries
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-real estate -actors -singers
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define wholesaler
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distributes goods
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give examples of wholesalers
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-clothing wholesaler -> buy jackets manufacturers -> divides large quantities into smaller ones and sells them to retailers
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define retailer
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purchases goods from a wholesaler and sells them to consumers, the final buyers of the goods
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give examples of retailers
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-Macy's -Target -JcPenny's
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define non-profit organization
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type of organization that focuses on providing a service, but not to make a profit
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what is one example of a non-profit organization
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Red Cross
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what type of business, since they make no profit, do not pay taxes?
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a non-profit organization
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what type of business must register with the government
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a non-profit organization
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define production
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process of creating, expanding, manufacturing, or improving goods and services
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define procurement
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the buying and reselling of goods that have already been produced
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give an example of procurement
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wholesalers
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define marketing
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the process of planning, pricing, promoting, selling, and distributing ideas, goods, and services
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what function of business involves getting consumers to buy your product and look at market research and consumer trends
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marketing
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define management
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the process of achieving company goals by planning, organizing, leading, controlling, and evaluating the effective use of resources
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define finance
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the business or art of money managemnt
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what function of business looks at financial statements to make future decisions
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finance
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define accounting
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involves maintaining and checking records, handling bills, and preparing financial reports for a business
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define cooperative
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an organization that is owned and operated by its members
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what function of business has groups of members pool their resources to save money, their purpose is to save money
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cooperative
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give 2 examples of cooperative function of business
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-small farms -ocean spray, (cooperative of cranberry growers) -you and your 2 siblings all shared a car
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Sole proprietorships account for about __________ of all the business in the United States
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70%
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Income from a sole proprietorship is
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taxed once
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one of the disadvantages of having a partnership is
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unlimited liability
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a major advantage of forming a corporations is ________ liability
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limited
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an organization that is owned and operated by its members is a
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cooperative
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a contractual agreement to use the name and sell the products or services of a company in a designated geographic area is called a
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franchise
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if one of your goals is to limit your personal liability, it would be best to organize your business as a
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corporation
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a business owned by ten people who share the risks and rewards of the business is a
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partnership
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the easiest way to organize a business is as a
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sole proprietorship
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a film that turns corn into vegetable oil is called a
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processor
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a company that gather materials in their original state from natural resources is called a
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producer
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a processor changes raw materials into a ____________ product
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more finished
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processed goods are turned into finished products by a
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processor
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a business that moves goods from one business to another is called a
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intermediary
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a firm that buys large quantities of produce from many farms and the divides fruits and vegetables into smaller quantities and sells them to grocery stores is a __________
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wholesaler
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the buying and reselling of goods that have already been produced is called
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procurement
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the process of achieving company goals by planning, organizing, directing, controlling, and evaluating the effective use of resources is called
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management
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maintaining and checking records, handling bills, and preparing financial reports for business is called
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accounting
