MGMT 1: Chapter 4 – Flashcards
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False
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T/F: If a sole proprietorship fails, the owner may lose whatever was invested in the business; however, the owner's personal assets are not at risk.
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True
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T/F: Small businesses can often provide more personalized customer service than bigger rivals.
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True
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T/F: A general partner takes an active role in the management of the business.
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True
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T/F: Venture capitalists provide funds for start-up businesses in exchange for part ownership in the new firm.
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Is usually simpler and less expensive than starting other forms of ownership.
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Starting a new business as a sole proprietorship:
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True
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T/F: Anthony is an employee of a textbook publisher. However, his desire is to establish a home-based business providing his services to a variety of publishers. Anthony's primary motivation is to escape the 9 to 5 world of corporate publishing and to enjoy the opportunity of working for himself. Anthony is an example of a micropreneur.
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Will use the firm's existing resources to develop new products.
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Keaton is an intrapreneur for a multinational electronics company. As an intrapreneur Keaton:
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False
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T/F: By filling out the correct paperwork annually, any corporation can qualify to be classified as an S corporation.
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False
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T/F: When writing a business plan, prospective entrepreneurs should remember to omit details regarding their experience and education since investors are only interested in the proposed business.
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True
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T/F: Independence, challenge, and opportunity are among the key reasons given by those who assume the risks of entrepreneurship.
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Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business.
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Which of the following best describes the difference between an intrapreneur and an entrepreneur?
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False
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T/F: An intrapreneur is the creative person who starts and manages a nonprofit organization.
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False
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T/F: A legal entity with authority to act and have liability separate from its owners is called a partnership.
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True
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T/F: In a general partnership, all partners share in management of the business and in the liability for the firm's debts.
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False
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T/F: Ted and Mark are partners in a dry cleaning business. They would like their brother Todd to join them. Unfortunately, partnership law states that only two partners can participate in a partnership.
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Bring a variety of talent to the business venture
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Successful entrepreneurial teams:
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True
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T/F: The three major forms of business ownership in the U.S. are sole proprietorships, partnerships, and corporations.
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In relation to other firms in its industry.
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A business's size is measured:
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False
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T/F: A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.
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False
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T/F: If a corporation has after-tax profits of $360,000, and elects to distribute this amount in the form of dividends to its stockholders, these distributions are free and clear of taxes because the corporation paid taxes on this amount prior to distribution.
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False
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T/F: Venture capitalists provide funds for small businesses as part of their philanthropy programs.
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Corporation
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The form of business ownership best suited to raising large amounts of money for expansion is the:
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Does business in one or more states, but is chartered in another state
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Which of the following statements is the most accurate? A foreign corporation:
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False
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T/F: Business plans are necessarily a bit vague since these are prepared prior to the beginning of business operations.
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True
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T/F: A good business plan describes the nature of the proposed business, the target market, the competitive advantages, and the qualifications of the owners.
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False
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T/F: Since creating a detailed business plan is almost impossible, entrepreneurs should focus on the other tasks needed to get their firm started.
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