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Business Law
Debts And Obligations
Equal Protection Under The Law
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Limited Liability Companies
Limited Liability Company
Uniform Partnership Act
Economics Unit 3 – Key Terms – Flashcards 66 terms

Keisha White
66 terms
Preview
Economics Unit 3 – Key Terms – Flashcards
question
Firm
answer
A business organisation such as a corporation, limited liability company, or partnership
question
Public limited companies / PLCs
answer
Large firms owned by thousands of shareholders, who employ managers or executives to run the business
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Marginal returns
answer
The increase in output that results from adding an extra input to the firm
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Specialisation
answer
A method of production where specific products or tasks are assigned to certain workers, so that they become every skilled at the specific task
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Short run
answer
The period of time in which at least one factor of production is fixed
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Long run
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The period of time in which are factors of production are variable
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The law of diminishing returns / the law of diminishing marginal productivity
answer
Sets in when the marginal product of labour, or another variable factor, starts to fall. This happens when one more unit of input adds less to total output than the previous unit of input.
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Technological change
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A change in the ability of a firm to produce at a different level of output with a given quantity of inputs
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Invention
answer
The creation or original design of something that has not existed before
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Innovation
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The act of making changes in, or developing, something already established, especially by introducing new ideas, methods and products
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Equilibrium
answer
A state of balance or rest, in which there is no reason for anything to change unless it is disturbed. In microeconomics, we usually see equilibrium as the point at which planned demand is equal to planned supply in a market
question
Normal profit
answer
The minimum level of profit needed to keep existing firms in production, while being insufficient to attract new firms into the market. It is included in the firm's ATC curve, because a firm must make normal profit to stay in business
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Supernormal profit
answer
Any extra profit above normal profit. In the long-run, and in the absence of barriers to entry, supernormal profit performs the function of attracting new firms in the market
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Monopoly
answer
A situation in which a single firm owns all, or nearly all, of the market for a given product or service. A pure monopoly owns 100%, whereas a monopoly can own 25% or more.
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Cartel
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A group of colluding firms that fix prices, forming a price ring, and often also divide up the market by allocating maximum levels of output for each firm. Usually seen in an oligopolistic market.
question
Game theory
answer
An analysis of strategic situations or games, in which the success of an individual, a firm, or a government, when making choices, depends on the choices of others
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Price discrimination
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Occurs when firms charge different prices to different consumers for the same product, based on differences in their ability and willingness to pay
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Contestable market
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A market in which the potential exists for firms to enter and leave the market, without incurring entry or exit costs. There are no sunk costs.
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Sunk costs
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Costs that are incurred when a firm enters a market, which it cannot recover if it decides to leave the market. An example is spending on advertising
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Hit-and-run entrants
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Firms that enter the market, make a quick profit, and leave. The ease of entry and exit in contestable markets allows this to happen
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Marginal revenue product / MRP
answer
The monetary value of the addition to a firm's total output brought about by employing one more worker
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Marginal physical product / MPP
answer
Also known as the marginal returns of labour, this is the increase in output that results from adding an extra input to the labour force
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Average cost of labour
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The total wage costs, divided by the number of workers employed
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Marginal cost of labour
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The addition to a firm's total cost of production resulting from employing one more worker
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Monopsony
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A single buyer in a market, just as a monopoly is a single seller
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Income
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A flow of money going to a factor of production, such as wages paid to workers, profits to businesses or benefits given to those who require them. It is measured per period of time, such as weekly, monthly or annually
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Wealth
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The stock of physical assets, such as land, houses and art, and financial assets, such as stocks and shares, which accumulates over time
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Market failure
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Occurs whenever the market mechanism or price mechanism performs unsatisfactorily, resulting in a misallocation of resources
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Partial market failure
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When the market still functions, but either produces the wrong quantity, or sets the wrong price
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Complete market failure
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The market does not supply any products. There is a 'missing market'
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Public good
answer
A good which exhibits the characteristics of non-excludability and non-rivalry
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Non-excludability
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People cannot be prevented from using the good or consuming its benefits
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Non-rivalry
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Consumption of the good by one person does not limit the benefits for other people
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Pure public good
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A public good for which it is impossible to exclude free-riders, such as national defence and police
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Quasi-public good
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A near public good, which is semi-non-rival and semi-non-excludable
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Negative externality
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An external cost for a third party, as a result of an economic activity
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Positive externality
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An external benefit for a third party, as a result of an economic activity
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Information failure / imperfect information
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When people have inaccurate, incomplete, uncertain or misunderstood data, so make potentially 'wrong' choices
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Asymmetric information
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When somebody (the consumer or the producer) knows more about a product than someone else in the market, making it difficult for them to do business
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Property rights
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Rights provided by law, to determine how a resource is used and whether that resource is owned by the government or by individuals
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The Tragedy of the Commons
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An economic theory by Garrett Harding, which states that individuals acting independently and rationally, according to their own self-interest, behave against the best interests of the whole group by depleting some common resource
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Tax
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A compulsory contribution to state revenue, levied by the government, either indirect such as VAT, or direct such as income tax
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Subsidy
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A grant given by the government which lowers the price of a good, and is usually designed to encourage production or consumption
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Direct provision
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When the government intervenes in the market to provide merit goods or public goods
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Pollution permit
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A licence given to a firm allowing them a legal right to pollute a certain amount per year
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Public ownership
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A state in which a firm is owned by the government
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Nationalisation
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When a firm is taken into public ownership
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Privatisation
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When state-owned assets are sold to the private sector
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Regulation
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The imposition of laws or rules regarding private-sector enterprise
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Regulatory capture
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Allegedly occurs when a regulator, such as the government, acts in the interest of the powerful firms it is supposed to be constraining, rather than in the interest of the consumers it is supposed to protect
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De-regulation
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The removal of government legislations and laws in a particular market, often involving removing barriers to competition
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Competitive tendering
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An auction process in which large investors or firms bid for the right to run a certain service or gain a certain contract
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Internal market
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Also known as a quasi-market, it is a public sector structure, designed to reap the efficiency gains of free markets, without losing the equity benefits of traditional public systems
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Public private partnership / PPP
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A situation in which the public sector and the private sector work in conjunction on a project, usually an infrastructure project such as a road
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Equality
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'Sameness' - all people are treated the same and provided with the same things. It is a positive concept as it can be measured
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Equity
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'Fairness' - a normative concept as it cannot be measured
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Horizontal equity
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Treating people in the same circumstances equally, for example, households with the same income and personal circumstances must pay the same income tax, and are eligible for the same welfare benefits
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Vertical equity
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Taking income from the rich, and redistributing it to the poor. This is controversial
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Relative poverty
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The government defines the relative poverty level as those earning below 60% of average earnings for an area
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Absolute poverty
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When a person cannot provide for his/her basic needs, including food, water and shelter
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Progressive taxation
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A tax that takes a larger percentage from the income of high-income earners, than it does from low-income earners. An example is income tax in the UK
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Regressive taxation
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A tax that takes a larger percentage from the income of low-income earners, than it does from high-income earners. An example is VAT in the UK
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Transfer payment
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A payment made to individuals by the government in order to redistribute income, such as welfare benefits
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Government failure
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When government intervention to resolve a market failure creates inefficiency and causes the problem to worsen
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Cost-benefit analysis / CBA
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A technique for evaluating all the costs and benefits of any economic action or decision, including all the social costs and benefits to the community and not just the private costs and benefits that happen to the economic agent undertaking the action
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Shadow pricing
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Placing a monetary value on a good which does not already have a monetary value, because it is not traded in a market
Business
Business Fundamentals
Debts And Obligations
Economics
economics 3 – Flashcards 32 terms

Sonia Kelly
32 terms
Preview
economics 3 – Flashcards
question
unlimited liability
answer
required that an owner is personally and fully responsible for all loss and debts
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inventory
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stock of goods held in reserve; includes finished goods waiting to be sold and raw materials to be used in production
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limited life
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situation in which a firm legally ceases to exist when an owner dies, quits, or a new owner is added; applies to sole proprietorships and partnerships
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limited partnership
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form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business
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bankruptcy
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court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time
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charter
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written government approval to establish a corporation; includes company name, address, purpose of business, number of shares of stock, and other features of the business
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stock
answer
certificate of ownership in a corporation; common or perferred stock
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stockholder
answer
person who owns a share or shares of stock in a corporation; same as shareholders
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shareholder
answer
stockholder
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dividend
answer
check paid to stock holders, usually quarterly, representing portion of corporate profits
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bond
answer
formal contract to repay borrowed money and interest on the borrowed
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principle
answer
amount borrowed when getting a loan or issuing a bond
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interest
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payment made for the use of borrowed money; usually paid at periodic intervals for long term bonds or loans
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double taxation
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feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income
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merger
answer
combination of two or more business enterprises to form a single firm
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income statement
answer
report showing a business's sales, expenses, and profits for a certain period, usually three months for a year
question
net income
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measure of business profits determined by subtracting all expenses, including taxes, from revenue
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Cash flow
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total amount of new funds the business generates from operations; broadest measure of profits for a firm, includes both net income and non-cash charges
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horizontal merger
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combination of two or more firms producing the same kind of product
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vertical merger
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combination of firms involved in different steps of manufacturing and marketing
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conglomerate
answer
firm with four or more businesses making unrelated products, with no single business responsible for a majority of its sales
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multinational
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corporation producing and selling without regard to national boundaries and whose business activities are located in several different countries
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nonprofit organization
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economic institution that operates like a business but doesn not seek financial gain ; schools, churches, community service organizations
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cooperative
answer
nonprofit association performing some kind of economic activity for the benefit of its members
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co-op
answer
cooperative
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credit union
answer
nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services
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labor union
answer
organization that works for its members; interests concerning pay, work hours, health coverage, fringe benefits, and other job related matters
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collective bargaining
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process of negotiation between union and management representatives over pay, benefits, and job related matters
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professional association
answer
nonprofit organization of professional or specialized workers seeking to improve working conditions, skill levels, and public perceptions of its profession
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chamber of commerce
answer
nonprofit organization of local business value whose purpose is to promote their interest
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better business bureau
answer
business sponsored non profit organization providing information on local companies to consumers
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public utility
answer
company providing essential services such as water and electricity to consumers, usually subject to some government regulations
Accounting
Current Replacement Cost
Debts And Obligations
Finance
Financial Accounting
Real Estate
Accounting 2010 chapter 3 – Flashcards 17 terms

Karlie Mack
17 terms
Preview
Accounting 2010 chapter 3 – Flashcards
question
The accountant for Max Corp. failed to make the adjusting entry to record depreciation for the current year. The effect of this error is which of the following?
answer
Asset, net income, and stockholder's equity are all overstated.
question
If a real estate company fails to accrue commission revenue
answer
assets are understated, and net income is understated
question
All of the following statements are true except one. Which statement is false? A. adjusting entries are required for a business that uses the cash basis B. a fiscal year may end on some date other than December 31. C. The expense recognition principle directs accountant to identify and measure all expenses incurred and deduct them from revenues earned during the same period D. Accrual accounting produces better information than cash-basis accounting
answer
A. Adjusting entries are required for a business that uses the cash basis.
question
The account Unearned Revenue is a(n):
answer
Liability
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Adjusting entries A. are needed to measure the period's net income or net loss B. do not debit or credit Cash C. update the accounts D. all of the above
answer
D. all of the above
question
Adjusting entry that debits an expense and credits a liability is which type?
answer
Accrued expense
question
On a trial balance, which of the following would indicate that an error has been made? A. salary expense has a debit balance B. service revenue has a debit balance C. Accumulated Deprecation has a credit balance D. All of the above indicate errors
answer
B. Service Revenue has a debit balance
question
The entry to close Management Fee Revenue would be which of the following?
answer
Management Fee Revenue Retained Earnings
question
Which of the following accounts is not closed? A. Dividends B. Interest Revenue C. Depreciation Expense D. Accumulated Depreciation
answer
D. Accumulated Depreciation
question
FedEx earns service of $750,000. how does this transaction affect FedEx's current and debt ratios?
answer
A. Improves both ratio
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Suppose Rose Corporation borrows $10 million on a 10-year note payable. How does this transaction affect Rose's current ratio and debt ratio?
answer
Improves the current ratio and hurts the debt ratio
question
In which month should revenue be recorded?
answer
In the month that goods are shipped to the customer
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An adjusting entry recorded June salary expense that will be paid in July. Which statement best describes the effect of this adjusting entry on the company's accounting equation?
answer
Assets are not affected, liabilities are increased, and stockholders' equity is decreased
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What is the effect on the financial statements of recording depreciation on equipment?
answer
Net income, assets, and stockholders' equity are all decreased
question
For 2014, Wyndham Company had revenues in excess of expenses. Which statement describes Wyndham's closing entries at the end of 2014 (assume there is only one closing entry for both revenue and expenses)?
answer
Revenues will be debited, expenses will be credited, and retained earnings and will be credited.
question
Which of the following accounts would not be included in the closing entries?
answer
Accumulated Depreciation
question
A major purpose of preparing closing entries is to:
answer
Update the Retained Earnings account
Business
Business Management
Chief Executive Officer
Chief Operating Officer
Debts And Obligations
Internal Revenue Code
Limited Liability Partnership
Better Business 101 – Chapter 6 – Flashcards 35 terms

Owen Clarke
35 terms
Preview
Better Business 101 – Chapter 6 – Flashcards
question
Sole proprietorships
answer
A type of unincorporated business owned and usually controlled by a single individual.
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Unlimited liability
answer
If business assets aren't enough to pay business debts, then personal assets, such as a house, can be used to pay the balance. The proprietor can lose an unlimited amount of personal assets.
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Partnership
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A type of business structure in which two or more entities (or partners) share the ownership and the profits and losses of the business.
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Partnership agreement
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A written agreement between the partners of a partnership.
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Capital
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Money in a business
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General partnership
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A type of partnership that is the default arrangement for a partnership and is the simplest of all partnerships to form.
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Limited partnership
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A type of partnership in which these partners are as involved as investors and as such are personally liable only up to the amount of their investment in the business and must not actively participate in any decisions of the business.
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General partners
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Full owners of a partnership business, are responsible for all the day-to-day business decisions, and remain liable for all the debts and obligations of the business.
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Limited partners
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As involved as investors, and as such, are personally liable only up to the amount of their investment in the business. They must not actively participate in any decisions of the business.
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Master Limited Partnership
answer
A business structure that combines the tax benefits of a limited partnership, but it is similar to a corporation in that it is publicly traded on a securities exchange.
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Limited liability partnership
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A form of business structure in which it protects the partners not only from any debt or liability incurred by the business but also from the liability of another partner.
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Corporation
answer
A specific form of business organization that is legally formed under state laws. It's considered a separate entity apart from its owners; it has legal rights like an individual, can own property, assume liability, pay taxes, enter into contracts, and sue or be sued.
question
C corporation
answer
Refers to Subchapter C of the Internal Revenue Code by which it is governed.
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S corporation
answer
A regular corporation that has elected to be taxed under a special section of the Internal Revenue Service code called Subchapter S.
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Shareholders
answer
When an entity or individual has an ownership interest in the company. (AKA stockholders)
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Stockholders
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When an entity or individual has an ownership interest in the company. (AKA shareholders)
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Apportioned ownership interest
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When the corporation provides the shareholders with stock certificates identifying the number of shares they own.
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Publicly owned corporation
answer
A corporation regulated by the US Securities and Exchange Commission because the shares of ownership can be traded on public stock exchanges.
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Board of directors
answer
Members of this group select and hire the business' management team of corporate officers as well as they make the major financing and business decisions for the corporation.
question
Chief executive officer
answer
The one who is typically responsible for the entire operations of the corporation and reports directly to the board of directors.
question
Chief financial officer
answer
The one who reports directly to the CEO and is responsible for analyzing and reviewing the business' financial data, reporting its financial performance, preparing budgets, and monitoring the firm's expenditures and costs.
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Chief operating officer
answer
The one who is responsible for the day-to-day operations of the organization and reports directly to the CEO.
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First-line managers
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People who directly supervise lower-level employees and help run the business.
question
Double taxation
answer
Occurs when taxes are paid on the same income twice.
question
Limited Liability Company
answer
This business entity combines the corporate advantages of limited liability with the tax advantages inherent in sole proprietorship and partnerships.
question
Merger
answer
When two companies come together cooperatively to form one company.
question
Acquisition
answer
When one company completely buys out another company.
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Synergy
answer
The effect achieved when two companies combine and the result is better than each company could achieve individually.
question
Horizontal merger
answer
A type of merger in which two companies sell the same types of products and are in direct competition with each other.
question
Vertical merger
answer
A type of merger between two companies that have a company/customer relationship or a company/supplier relationship.
question
Product extension merger
answer
A type of merger between two companies selling different but related products in the same market.
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Market extension merger
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A type of merger between two companies that sell the same products in different markets.
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Conglomeration
answer
A type of merger between two companies that have no common business areas but instead merge to obtain diversification.
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Articles of organization
answer
The title of the document filed to create a corporation.
question
Cooperative
answer
A business that is owned and governed by members who use its products or services.
Business Law
Debts And Obligations
Legal Management
Limited Liability Company
blaw chapter 33 – Flashcards 70 terms

Alice Rees
70 terms
Preview
blaw chapter 33 – Flashcards
question
A limited liability company is operated in compliances with state law.
answer
true
question
A limited company is a legal entity apart from its owners.
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true
question
Federal law dictates the requirements for the formation of a limited liability company.
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false
question
Forming a limited liability company requires filing articles of organization in a state office.
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true
question
For federal jurisdictional purposes, a limited liability company can choose to be treated like a corporation.
answer
false
question
The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status.
answer
false
question
A limited liability company limits the personal liability of its members.
answer
true
question
For federal income tax purposes, a limited liability company can choose to be taxed like a corporation.
answer
true
question
A limited liability company cannot be taxed as a partnership.
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false
question
A foreign limited liability company (LLC) is an LLC owned by an entity outside the United States.
answer
false
question
An operating agreement for limited liability company need not be in writing.
answer
true
question
A limited liability company is required to have an operating agreement.
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false
question
Most limited liability company (LLC) statues provide that unless the members agree otherwise, all profits of the LLC will be divided equality.
answer
true
question
In a limited liability company, members must participate in the management of the company.
answer
false
question
In a limited liability company, members cannot participate in its management.
answer
false
question
In a limited liability company, members do NOT have to participate in its management.
answer
true
question
Most limited liability company statutes have strict provisions regulating members' meetings.
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false
question
The dissociation of a member of a limited liability company in violation of the operating agreement is legally wrongful.
answer
true
question
Unless otherwise agreed, the participants in a joint venture have an equal voice in controlling the enterprise.
answer
true
question
Giving control of a joint venture to one of its participants does not affect the status of the relationship.
answer
true
question
A joint venture is taxed like a partnership.
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false
question
Unless otherwise agreed, the participants in a joint venture share its profits equally.
answer
true
question
A joint venture does not terminate unless one of its participants dies.
answer
false
question
The participants in a joint venture have more implied and apparent authority than the partners in a partnership.
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false
question
A cooperative may take the form of a corporation.
answer
true
question
A syndicate may exist in the form of a partnership but not a corporation.
answer
false
question
A group of individuals getting together to finance a particular project may form a syndicate.
answer
true
question
The owners of a joint stock company are personally liable for its obligations.
answer
true
question
In some states, business trusts pay corporate taxes.
answer
true
question
The owners of an incorporated cooperative are personally liable for its obligations.
answer
false
question
A syndicate may be organized as a corporation but not as a partnership.
answer
false
question
The beneficiaries of a business trust are personally liable for its obligations.
answer
false
question
Like a corporation, the ownership of a joint stock company is represented by shares of stock.
answer
true
question
The owners of an unincorporated cooperative have joint liability for its obligations.
answer
true
question
A business trust is created by a written trust agreement.
answer
true
question
Fay is a member of Garden Groves LLC. Like other members of limited liability companies, Fay's liability for Garden Groves's obligations resembles the liability of...
answer
(d) a shareholder of a corporation
question
High Pointe LLC's members include Irvin. For purposes of holding title to property, High Pointe is...
answer
(c) a legal entity apart from the owners
question
Bee Hive Honey, LLC's members include Chad. For purposes of suing and being sued, Bee Hive Honey is...
answer
(c) a legal entity apart from the owners
question
Greta is a member of Hovercraft LLC. As a member, Greta is...
answer
(c) an owner
question
Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liability company, she must file with a central state agency...
answer
(c) articles of organization
question
Location Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location Realty is most likely a citizen of...
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(b) every state in which its members are citizens
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Mit-E Mart LLC was formed in New Jersey. Mit-E Mart's members are Odel, who is a citizen of New Jersey, and Pola, who is a citizen of New York. For federal diversity jurisdictional purposes, Mit-E is a citizen of...
answer
(c) New Jersey and New York
question
Jay is a member of Kappa, LLC, a limited liability company. Jay is liable for Kappa's debts...
answer
(b) to the extent of his capital contribution
question
Energy Resources, LLC, is a limited liability company. Rather than dis-tribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as...
answer
(a) a corporation
question
China Bank is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to an LLC in the United States, China Bank can...
answer
(b) become a member
question
QuizBooks LLC is a limited liability company. Like any other LLC, unless QuizBooks chooses otherwise, the firm will be taxed as...
answer
(c) a partnership
question
Serious Gamers, LLC, is a limited liability company. Among the mem¬bers, a dispute arises that their operating agreement does not cover. No statute applies. The dispute is governed by the principles of...
answer
(b) partnership law
question
CPA Accounting, LLC, is a limited liability company. If the law in CPA's state is like the law in most states, unless the members have agreed other-wise, participants in the firm's management will be considered to include...
answer
(a) all members
question
Kristal is a member of Laboratory CSI Services, LLC, a limited liability company. Kristal can participate in the firm's management...
answer
(c) to any extent
question
Waste Management Services, LLC, is a member-managed limited liability company. If the law in Waste's state is like the law in most states, unless the members have agreed otherwise, voting rights are apportioned according to...
answer
(a) capital contributions
question
Cookie Kiosk LLC's members and managers are Dwight, Emma, and Fawn. After Dwight's relationship to Cookie Kiosk ends, Emma and Fawn agree to discontinue the firm's business. This is most likely...
answer
(b) optional
question
Flip is a member of Great States Trucking LLC. Flip's relationship to Great States ends, but the firm continues to do business. This is...
answer
(a) dissociation
question
Build-Rite Construction Corporation and Deals-R-Us, Inc., combine their efforts to build an office and retail complex. Their form of business organization is...
answer
(c) a joint venture
question
Omega Corporation and Precision Coding, Inc., two software firms, wish to combine their research and development capabilities to make a special, limited edition computer game. The most appropriate legal entity for this project might be...
answer
(c) a joint venture
question
Ray, Sully, and Toma form a syndicate to buy a professional football team. This syndicate could be set up as...
answer
(b) a corporation or a partnership
question
Loni, Michel, and Nita are investors in Oceanic Exploration, a busi¬ness trust. A business trust is managed by its...
answer
(d) trustees
question
Jen, Carlo, and other consumers form Metro Purchasing Cooperative. This form of business organization makes it possible for these individuals to...
answer
(d) pool their resources to gain an advantage in the market
question
Drew is a beneficiary of a business trust. As a beneficiary, Drew is required to...
answer
(d) neither distribute the profits nor manage the property
question
As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is...
answer
(c) nothing
question
Elmo is the owner and manager of a business trust. Under the terms of a business trust, Elmo is required to...
answer
(a) distribute the profits and manage the property
question
Fab is the owner and manager of a business trust. Gilly is the benefici¬ary. Responsibility for the debts and obligations of the trust rest with...
answer
(b) Fab only
question
Consumers in Delta City form a business organization to provide, without profit, an economic service to its members. This is...
answer
(b) a cooperative
question
Exotic Stuff Company and First Pier, Inc., form a business organization to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This business organization is...
answer
(b) a joint stock company
question
Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a shopping mall. Their selected form of business organization is an investment group, or...
answer
(d) a syndicate
question
Dreem Land Corporation and EZ Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and EZ. This form of a business organization is...
answer
(a) a business trust
question
National Capital Corporation and International Investments, Inc., form a joint stock company. The ownership of a joint stock company is represented by...
answer
(b) shares of stock
question
Neverend Music Company and Monotonous Metronome Corporation form a joint stock company. A joint stock company can be formed for, at the most...
answer
(b) a perpetual existence
question
Big Valu Grocery Stores is an unincorporated cooperative. Big Valu and other unincorporated cooperatives are generally treated like...
answer
(d) partnerships
question
Buyers Club is an incorporated cooperative. Like other incorporated cooperatives, Buyers Club distributes profits to its owners on the basis of...
answer
(c) their transactions with the cooperative
question
Vela and other farmers in Washington County form a business organization to provide, without profit, an economic service to its members. This is...
answer
(b) a cooperative
Business Law
Business Management
Debts And Obligations
Federal Trade Commission
Terms And Conditions
Business Law Ch 40 Terms – Flashcards 40 terms

Alexandra Robertson
40 terms
Preview
Business Law Ch 40 Terms – Flashcards
question
Licensing
answer
permits one business to use another business's trademarks, service marks, trade names, and other intellectual property in selling goods and services.
question
Joint Venture
answer
allows two or more businesses to combine their resources to pursue a single project or transaction
question
Strategic Alliances
answer
used to enter foreign markets
question
Franchise
answer
established when one party (franchisor, or licensor) licenses another party (the franchisee, or licensee) to use the franchisor's trade name, trademarks, commercial symbols, patents, copyrights, and other property in the distribution and selling of goods and services. generally, franchisor and franchisee are established as separate corporations
question
4 Basic Forms of Franchises
answer
1) distributorship franchise 2) processing plant franchise 3) chain-style franchise 4) area franchise
question
Distributorship Franchise
answer
franchisor manufactures a product and licenses a retail dealer to distribute a product to the public ex - ford motor company manufactures automobiles and franchises independently owned automobile dealers (franchisees) to sell them to the public
question
Processing Plant Franchise
answer
franchisor provides a secret formula or the like to the franchisee. The franchisee then manufactures the product at its own location and distributes it to retail dealers ex - coca-cola corporation, which owns secret formulas for making Coca-Cola and other soft drinks, licenses regional bottling companies to manufacture and distribute soft drinks under the "Coca-Cola" name and other brand names
question
Chain-Style Franchise
answer
franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory. The product is made or the service provided by the franchise. Most fast-food franchises use this form ex - pizza hut corporation franchises independently owned restaurant franchises to make and sell pizzas to the public under the "Pizza Hut" name.
question
Area Franchise
answer
franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor. The area franchisee is called a subfranchisor. An area franchise is granted for a certain designated geographical area, such as state, region, or another agreed-upon area. Area franchises are often used when a franchisor wants to enter a market in another country. ex - if Starbucks wanted to enter the country of Vietnam to operate its coffee shops, it could grant an area franchise to a Vietnamese company, which would then choose the individual franchisees in that country
question
Uniform Franchise Offering Circular (UFOC)
answer
a uniform disclosure document that requires a franchisor to make specific presale disclosures to prospective franchisees. The UFOC and state laws requires a franchisor to make specific presale disclosures to prospective franchisees. Information that must be disclosed includes a description of the franchisor's business, balance sheets, and income statements of the franchisor for the preceding three years, material terms of the franchise agreement, any restrictions on the franchisee's territory, reasons permitted for the termination of the franchise, and other relevant information.
question
FTC Franchise Rule
answer
requires franchisors to make full presale disclosures nationwide to prospective franchisees. FTC does not require the registration of the disclosure document with the FTC prior to its use. The UFOC satisfies both state regulations and the FTC.
question
Disclosure of Sales or Earnings Projections Based on Actual Data
answer
if a franchisor makes sales or earnings projections for a potential franchise location that are based on the actual sales, income, or profit figures of an existing franchise, the franchisor must disclose the following: - number and % of its actual franchises that have obtained such results - cautionary stmt in at least 12-pt boldface type that reads, "Caution: Some outlets have sold (or earned) this amount. There is no assurance you'll do as well. If you rely upon figures, you must accept the risk of not doing so well"
question
Disclosure of Sales or Earnings Projections based on Hypothetical Data
answer
if franchisor makes sales or earnings projections based on hypothetical examples, franchisor must disclose: - assumptions underlying the estimates -the number and percentage of actual franchises that have obtained such results -cautionary statement, "Caution: Some outlets have sold (or earned) this amount. There is no assurance you'll do as well. If you rely upon figures, you must accept the risk of not doing so well"
question
FTC Notice
answer
a statement required by the FTC to appear in at least 12-point boldface type on the cover of a franchisors required disclosure stmt to prospective franchisees. e.g.- "we haven't checked it out, and don't know if it's correct. Study carefully. Don't rely on it alone... It may be against law.."
question
franchise agreement
answer
sets forth the T&C's of the franchise. although some states permit oral franchise agreements, most have enacted statutes of Frauds that requires franchise agreements to be in writing. to prevent unjust enrichment, courts occasionally enforce oral franchise agreements that violate the Statute of Frauds. A franchise agreement often specifies the total investment that a franchisee must provide in order to be granted the franchise
question
Topics Covered in a Franchise Agreement
answer
-quality control standards -training requirements -covenant not to compete -arbitration clause -other t
question
quality control standards
answer
protect name and reputation, inspections, etc
question
training requirements
answer
franchisees usually required to attend training programs
question
covenant not to compete
answer
prohibit franchisees from competing with the franchisor during a specific time and in a specified area after the termination of the franchise. unreasonable covenants not to compete are void
question
arbitration clause
answer
provides that any claim or controversy arising from the franchise agreement or an alleged breach thereof is subject to arbitration. U.S. Supreme Court has held such causes to be enforceable
question
Other T
answer
include restrictions on use of franchisor's trade name, trademarks, logo, etc
question
initial license fee
answer
lump-sum payment for privilege of being granted a franchise
question
royalty fees
answer
fee for the continued use of the franchisor's trade name, property, and assistance that is often computed as a percentage of the franchisee's gross sales. royalty fees are usually paid on a monthly basis
question
assessment fee
answer
fee for such things as advertising and promotional campaigns and administrative costs, billed either as a flat monthly or annual fee or as a percentage of gross sales
question
lease fees
answer
payment for any land or equipment leased from the franchisor, billed either as a flat monthly or annual fee or as a percentage of gross sales or other agreed-upon amount
question
cost of supplies
answer
involves payment for supplies purchased from the franchisor
question
consulting fees and other expenses
answer
monthly or annual fee for having experts from the franchisor help the franchisee to better conduct business
question
trade secrets
answer
product formulas, business plans, models, other ideas. ideas that make a franchise successful but that do not qualify for trademark, patent, or copyright protection
question
unfair competition
answer
misappropriation of a trade secret, holder of the trade secret can sue the offending party for damages and obtain an injunction to prohibit further unauthorized use of the trade secret
question
liability of franchisor and franchisee
answer
franchisor deals with franchisee as an independent contractor. franchisees are liable on their own contracts and are liable for their own torts (negligence). franchisors are liable for their own contracts and torts. Generally, neither party is liable for the contracts or torts of the other ex - McDonalds corp grants a restaurant franchise to Tina Corp. Tina Corp opens the franchise restaurant. One day a customer spills a milkshake on the floor. Employees at the franchise fail to clean up the spilled shake, an hour later, another customer slips on the spilled shake and suffers severe injuries. Injured customer can recover damages from the franchisee, Tina Corp, because it was negligent. It cannot recover damages from the franchisor, McDonalds Corp. ex - suppose that McDonalds Corp, franchisor, grants a franchise to Gion Corp, franchisee. McDonalds enters into a loan agreement with Citibank, it borrows $100M. Gion Corp, franchisee, is not liable on the loan. McDonalds Corp, franchisor and debtor is liable on loan.
question
actual agency
answer
created when a franchisor expressly or implicitly makes a franchise its agent. franchisor is liable for the contracts entered into and torts committed by the franchisee while the franchisee is acting within the scope of the agency. franchisors very seldom appoint franchisees as their agents
question
apparent agency
answer
created when a franchisor leads a third person into believing that the franchisee is its agent. for example, a franchisor and franchisee who use the same trade name and trademarks and make no effort to inform the public of their separate legal status may find themselves in such a situation. however, mere the use of the same name does not automatically make a franchisor liable for the franchisee's actions. the court's decision of whether an apparent agency has been creaetd depends on the facts and circumstances of the case
question
for cause
answer
most franchise agreements permit a franchisor to terminate the franchise for this. ex - continued failure of a franchisee to pay franchise fees or meet legitimate quality control stanards would be deemed just cause
question
wrongful termination
answer
unreasonably strict application of a just cause termination clause. a single failure to meet a quality control standard, for example, is not cause of termination
question
breach of a franchise agreement
answer
aggrieved party can sue the breaching party for rescission of the agreement, restitution, and damages
question
licensing
answer
when one business or party that owns trademarks, service marks, trade names, and other intellectual property (licensor) contracts to permit another business or party (licensee) to use its trademarks, service marks, trade names, and other intellectual property in the distribution of goods, services, software, and digital information. ex - walt disney company owns merchandising rights to winnie the pooh stories and all characters associated. disney enters into an agreement whereby it permits the beijing merchandising company, bus under chinese law, to manuf and distribute a line of clothes, toys, and other items bearing likeness of winnie the pooh characters. this is a license
question
joint venture
answer
arrangement in which two or more business entites combine their resources to pursue a single project or transaction. resemble partnerships, except that partnerships are usually formed to pursue ongoing business ops rather than to focus on a single project or transaction. joint ventures have equal rights to manage a joint venture. joint venturers owe each other the fiduciary duties and loyalty and care. if a joint venturer violates these duties. it is liable for the damages the breach causes
question
joint venture partnership
answer
when a joint venture is operated as a partnership. ex - new oil filed is discovered in northern canada. chevron and conoco would each like to drill for oil but neither has sufficient resources to do it alone. they join together to form a joint venture partnership and contributes $100M each of capital to joint venture. if joint venture fails and owes $1B to creditors, are each responsible for joint venture's unpaid debts and obligations.
question
joint venture corporation
answer
joint ventures often form this to operate the joing venture. joint venturers are shareholders of the joint venture corporation. joint venture corporation is liable for its debts and obligations. joint venturers are liable for the debts and obligations of the joint venture corporation only up to their capital contributions to the joint venture corporation ex - chevron and conoco form a 3rd corp called canada oil to operate joint venture. chevron and conoco each contribute $100M to canada oil and each becomes a shareholder oc canada oil. if joint venture fails and canaada oil owes $1B to creditors, which it cannot pay, chevron and conoco each loses its $100M capital contribution but is is not liable for any further unpaid debts or obligations of canada oil
question
strategic alliance
answer
arrangement between 2 or more companies in the same industry in which they agree to ally themselves to accomplish a designated objective. a strategic alliance allows the companies to reduce risks, share costs, combine technologies, and extend their markets. for example, companies often enter into strategic alliances when they decide to expand internationally into foreign countries. strategic alliances do not have the same protection as mergers, joint ventures, or franchising, and sometimes they are dismantled. consideration must always be given to the fact that a strategic alliance partner is also a potential competitor
Business Law
Debts And Obligations
Legal Management
Limited Liability Partnership
Business Organizations – General Partnerships/pgs. 682-691 – Flashcards 43 terms

Collin Foley
43 terms
Preview
Business Organizations – General Partnerships/pgs. 682-691 – Flashcards
question
General Partnership (Ordinary Partnership)
answer
An association of two or more persons to carry on as co-owners of a business for profit [UPA Section 6(1)]
question
general partners (partners)
answer
persons liable for the debts and obligations of a general partnership
question
Uniform Partnership Act (UPA)
answer
a model act that codifies partnership law. most states have adopted this in whole or in part.
question
criteria to qualify as a general partnership
answer
It must be: 1. an association of two or more persons 2. carrying on a business 3. as co-owners 4. for profit
question
the most important factor in determining co-ownership of a business
answer
whether the parties share the business's profits and management responsibility
question
prima facie evidence of a general partnership
answer
receipt of a share of business profits
question
no inference of the existence of a general partnership is drawn if profits are received in payment of any of these:
answer
1. a debt owed to a creditor in installments or otherwise, 2. wages owed to an employee, 3. rent owed to a landlord, 4. an annuity owed to a widow, widower or representative of a deceased partner, 5. interest owed on a loan, or 6. consideration for the sale of goodwill of a business
question
general partnership
answer
-can operate under the names of any one or more of the partners or under a fictitious business name. -must file a fictitious business name statement (d.b.a.) -must publish a notice of the use of the trade name in a newspaper of general circulation where it does business -name cannot indicate that it is a corporation (cannot use "inc.") -name cannot be similar to the name used by existing business entity
question
general partnership agreement (articles of general partnership or articles of partnership)
answer
a written agreement that partners sign to form this.
question
general partnerships that exist for more than one year or are authorized to deal in real estate
answer
must be in writing under the Statute of Frauds.
question
General partnerships
answer
do not pay federal income taxes
question
flow-through taxation
answer
the income and losses of partnership flow onto and have to be reported on the individual partners' personal income tax returns.
question
right to participate in management
answer
a situation in which, unless otherwise agreed, each partner has a right to participate in the management of a partnership and has an equal vote on partnership matters.
question
right to share in profits
answer
mandated by UPA, a general partner has right to share in earnings from the investment of capital.
question
sharing of profits and losses
answer
--when partnership agreement provides for the sharing of profits but is silent as to how losses are to be shared, losses are shared in same proportion as profits. --If partnership agreement provides for sharing of losses but is silent as to how profits are to be shared, profits are shared equally.
question
right to compensation
answer
UPA provides that no general partner is entitled to remuneration for performance in the partnership's business. Partners are not entitled to receive salary for providing services to the partnership unless agreed to by partners.
question
right to indemnification
answer
a general partner is entitled to reimbursement for expenditures that are reasonably incurred in the ordinary and proper conduct of business.
question
right to return of loans
answer
a partner who makes a loan to the partnership becomes a creditor of the partnership. He is entitled to loan repayment with interest. (subordinated to claims of creditors who are not partners.)
question
right to return of capital
answer
termination of partnership, partners are entitled to return of capital contributions.
question
right to information
answer
each general partner has the right to demand true and full information from any other partner of all things affecting the partnership. other partners have duty to provide this information
question
Duties of General Partners
answer
Duty of Loyalty Duty of Care Duty to Inform Duty of Obedience
question
Duty of Loyalty
answer
a duty that a partner owes not to act adversely to the interests of the partnership
question
Duty of Care
answer
The obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances. A breach of this duty is negligence.
question
Duty to Inform
answer
a duty a partner owes to inform his or her co-partners of all information he or she possesses that is relevant to the affairs of the partnership.
question
Duty of obedience
answer
a duty that requires partners to adhere to the provisions of the partnership agreement and the decisions of the partnership.
question
action for an accounting
answer
a formal judicial proceeding in which the court is authorized to 1. review the partnership and the partners' transactions and 2. award each partner his share of the partnership assets This results in a money judgment for or against partners according to the balance struck.
question
unlimited personal liability of a general partner
answer
a general partner's personal liability for the debts and obligations of the general partnership. partners have personal liability for the torts and contracts of the partnership.
question
joint and several liability
answer
tort liability of partners together and individually. A plaintiff can sue one or more partners separately. If successful, the plaintiff can recover the entire amount of the judgment from any or all of the defendant-partners who have been found liable.
question
joint liability (contract liability)
answer
liability of partners for contracts and debts of the partnership. A plaintiff must name the partnership and all of the partners as defendants in a lawsuit
question
liability incoming partners
answer
a new partner is liable for the existing debts and obligations (antecedent debts) of the partnership to the extent of his capital contributions. the incoming partner is liable for debts and obligations incurred by the partnership after becoming a partner.
question
liability of outgoing partners
answer
if general partnership is dissolved, each general partner is personally liable for debts and obligations of the partnership that exist at the time of dissolution. If general partnership is dissolved because a partner leaves the partnership and the partnership is continued by remaining partners, the outgoing partner is liable for the debts and obligations of the partnership at the time of dissolution, but not for new debts/obligations incurred after dissolution, as long as proper notification of his withdrawal is given to the creditor.,
question
partnership for a term
answer
a partnership created for a fixed duration
question
partnership at will
answer
a partnership created with no fixed duration.
question
dissolution
answer
the change in the relationship of partners in a partnership caused by any partner ceasing to be associated in the carrying on of the business
question
winding up
answer
the process of liquidating a partner's assets and distributing the proceeds to satisfy claims against the partnership. follows its dissolution
question
wrongful dissolution
answer
a situation in which a partner withdraws from a partnership without having the right to do so at that time. the partner is liable for damages causes by the wrongful dissolution of the partnership.
question
notice of dissolution
answer
dissolution of a partnership terminates the partners' actual authority to enter into contracts or otherwise act on behalf of the partnership. Notice of Dissolution must be given to certain third parties.
question
actual notice
answer
third parties who have actually dealt with the partnership must be given actual notice (verbal or written) of dissolution or have acquired knowledge of dissolution from another source.
question
constructive notice
answer
third parties who have not dealt with the partnership but have knowledge of it must be given either actual or constructive notice of dissolution. this consists of publishing a notice of dissolution in a newspaper of general circulation serving the area where the business of the partnership was regularly conducted.
question
third parties
answer
third parties who have not dealt with the partnership and do not have kinowlefge of it do not have to be given notice.
question
apparent authority
answer
question
distribution of assets.
answer
question
continuation of general partnership after dissolution
answer
Articles Of Organization
Business Law
Debts And Obligations
Legal Management
Limited Liability Companies
Limited Liability Company
Uniform Partnership Act
Bus Law Ch. 38 – Flashcards 40 terms

Robert May
40 terms
Preview
Bus Law Ch. 38 – Flashcards
question
The law governing limited liability companies is uniform.
answer
False
question
Members of limited liability companies are shielded from personal liability in many situations.
answer
True
question
The alter-ego theory can be applied to a corporation, but not a limited liability company.
answer
False
question
Limited liability companies are entities apart from their owners.
answer
True
question
A limited liability company can be taxed as a partnership.
answer
True
question
A limited liability company is a citizen of every state of which their members are citizens.
answer
True
question
A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.
answer
True
question
Unless a limited liability company indicates otherwise, the Internal Revenue Service automatically taxes it as a partnership.
answer
True
question
For federal income tax purposes, one-member limited liability companies are not taxed.
answer
False
question
Most states apply to a limited liability company (LLC) formed in another state the law of the state where the LLC was formed.
answer
True
question
A limited liability company must be managed by nonmembers.
answer
False
question
Limited liability company operating agreements typically contain provisions relating to management.
answer
True
question
If a limited liability company (LLC) agreement does not cover a topic, the state LLC statute will govern.
answer
True
question
A member of a limited liability company (LLC) has the power and the right to dissociate from the LLC at any time.
answer
False
question
Generally, a dissociated member of a limited liability company (LLC) has the right to buy his or her interest in the LLC from the other members.
answer
False
question
If a member's dissociation from a limited liability company is rightful, normally the dissociated member has the right to force the LLC to dissolve.
answer
False
question
Most courts apply the same principles to joint ventures as they apply to partnerships.
answer
True
question
A joint stock company is generally treated as a partnership.
answer
True
question
The law considers all new, single-owner businesses to be sole proprietorships unless the owner affirmatively adopts some other form.
answer
True
question
Limited personal liability obviates the need to obtain for insurance for significant business liability risks.
answer
False
question
Coco is considering forms of business organization for her concessions business—Coco's Cakes. Most states require that a limited liability company have
answer
At least one member
question
Bee Hive Honey, LLC's members include Chad, Dolores, and others. For purposes of suing and being sued, Bee Hive Honey is
answer
A legal entity apart from the owners
question
Otto is considering forms of business organization for Pro Tree Service, his landscaping firm. Like most states, Otto's state requires that to form a limited liabil¬ity company, he must file with a central state agency
answer
Articles of organization
question
Custom Auto Body & Detailing, LLC, is a limited liability company. Unless indi¬cated otherwise on the Custom Auto's federal tax form, the firm will be taxed as
answer
A partnership
question
Location! Realty LLC is a limited liability company. Like other LLCs, for federal jurisdictional purposes, Location! Realty is most likely a citizen of
answer
Every state in which its members are citizens
question
Business Enterprise Company agrees to sell a commercial office building and parking garage to City Investments, Inc., which assigns the rights to the realty to Downtown Properties, LLC. Downtown Properties does not yet exist, but once it is created and comes into existence, the contract on novation will most likely be
answer
Enforceable
question
Qatar Global Investments is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can
answer
become a member
question
Arnie is a member of Bowling & Billiards, LLC, a limited liability company. Arnie can participate in the firm's management
answer
to any extent
question
StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the mem¬bers, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be
answer
divided equally among the members
question
Dairy Products, Inc., and Eden Farms Corporation form a joint venture to make and test-market Frosty Ice Cream. A joint ven¬ture is usually formed for
answer
A single transaction or project
question
Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same principles to this joint venture as it applies to
answer
Partnerships
question
Oni's Adventure Travel and Paquito's Wild River Tours form a joint venture. Oni can participate in the venture's management
answer
To any extent
question
Lauren, Marcella, and Norell form a syndicate to buy a professional soccer franchise. This syndicate could be set up as
answer
a corporation
question
Transworld Import Company and USA Export, Inc., form a business organiza-tion to engage in importing and exporting. Its property is held in the names of the members and its shareholders have personal liability. This or¬ganization is
answer
A joint stock company
question
As the beneficiary of a business trust, Kevin's liability for trust debts and obligations is
answer
nothing
question
Dreem Land Corporation and EZ Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and EZ. This form of a business organization is
answer
A business trust
question
Gabriella is a beneficiary of a business trust. As a beneficiary, she is required to
answer
None of these choices
question
As the trustee of a business trust, Bertoldi is required to
answer
distribute the trust's profits
question
Kalin, Liza, and other consumers form MuniMart Cooperative. This form of business organization makes it possible for these individuals to
answer
pool their resources to gain an advantage in the marketplace
question
Medical Professionals Supply Source is an unincorporated cooperative. Unincorporated cooperatives are often treated like
answer
partnerships
Business Law
Debts And Obligations
Emphasize The Importance Of
Joint And Several Liability
Legal Management
Chapter 10: Business Organizations – Flashcards 65 terms

Amari Finch
65 terms
Preview
Chapter 10: Business Organizations – Flashcards
question
An _____ is by the definition one who initiates and assumes the financial risks of a new enterprise and undertakes to provide or control its management.
answer
entrepreneur
question
The simplest form of business organization, in which the owner is the business.
answer
Sole Proprietorship
question
Thus, anyone who does business without creating a separate business organization, such as a partnership or corporation, has a _____.
answer
sole proprietorship
question
More than ___ of all U.S. businesses are sole proprietorships. They are usually small enterprises with revenues of less than __ per year.
answer
two-thirds /$1 million
question
Any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright in the selling of goods or services.
answer
Franchise
question
One receiving a license to use another's (the franchisors) trademark, trade name, or copyright in the sale of goods and services.
answer
Franchisee
question
One licensing another (the franchisee) to use the owners trademark, trade name, or copyright in the selling of goods and services.
answer
Franchisor
question
A _____ arises when a manufacturing concern (franchisor) licenses a dealer (franchisee) to sell its product. Example: car dealership
answer
Distributorship
question
In ____, such as a burger king restaurant or Hilton hotel, a franchise operates under a franchisors trade name and is identified as a member of a select group of dealers that engage in the franchisor's business.
answer
Chain-style business operation
question
In a ______ , the franchisor transmits to the franchisee the essential ingredients or formula to make a particular product.
answer
Manufacturing or processing plant arrangement
question
The ___ ___ specifies the terms and conditions of the franchise and spells out the rights and duties of the franchisor and the franchisee.
answer
franchise contract
question
The franchisee ordinarily pays an __ or __ price for the franchise license. This fee is separate from the various products that the franchisee purchases from or through the franchisor.
answer
initial / lump-sum
question
The franchise agreement may specifiywhether the premises for the business must be leased or purchased outright.
answer
Business Premises
question
Typically, the franchisor will determine the territory to be served. Some franchise contracts give the franchisee exclusive rights, or "territorial rights" to a certain geographic area.
answer
Location of the Franchise
question
Although the day-to-day operations of the franchise is normally left to the franchisee, the franchise agreement may provide for the amount of supervision and control agreed on by the parties.
answer
Quality Control by the Franchisor
question
Usually, the franchise agreement will specify that the termination must be "for cause," such as death or disability of the franchisee, insolvency of the franchisee or breach of the franchise agreement. Most franchise contracts provide that notice of termination must be given. If no set time for termination is specified, then a reasonable time, with notice, will be implied.
answer
Termination of the Franchise
question
Because a franchisors termination of a franchise often has adverse consequences for the franchisee, much franchise litigation involves claims of ___.
answer
Wrongful Termination
question
Federal and state laws protect franchisees from the arbitrary or unfair termination of their franchises by the franchisors.
answer
Good Faith and Fair Dealing
question
Traditionally, partnerships have been classified as either ____ or ____.
answer
general partnerships/ limited partnerships
question
___ is designed for professionals who normally do business as partners in a partnership.
answer
Limited liability partnership
question
An agreement by two or more persons to carry on, as co owners, a business for profit.
answer
Partnership
question
A ____ arises from an agreement, express or implied, between two or more persons to carry on a business for profit.
answer
general partnership
question
1. A sharing of profits and losses. 2. A joint ownership of the business. 3. An equal right in the management of the business.
answer
3 essential elements to a partnership
question
No particular form of partnership agreement is necessary for the creation of a partnership, but for practical reasons, the partnership agreement should be in ____.
answer
writing
question
A written agreement that sets forth each partners rights in, and obligations to, the partnership.
answer
Articles of Partnership
question
A key advantage of the partnership is that the firm itself does not _____.
answer
pay federal income taxes
question
The main disadvantage of the partnership is that the partners are subject to ____ liability for partnership obligations.
answer
personal
question
A doctrine under which a plaintiff may sue, and collect judgement from, any of several jointly liable defendants.
answer
Joint and Several Liability
question
Additionally, a partner who commits a tort that results in a judgement against the partnership may be required to repay the firm for any damages it pays.
answer
...
question
A relationship founded on trust and confidence
answer
Fiduciary Relationship
question
1. A partners duty of loyalty has two aspects. A partner must account to the partnership for any profit or benefit from the firm's business or the use of its property. A partner must also refrain from dealing with the firm as an adverse party or competing with it. 2. A partners duty of care is limited to refraining from negligent or reckless conduct, intentional misconduct, and violations of the law.
answer
Fiduciary Duties
question
A partnership consisting of one or more general partners and one or more limited partners.
answer
Limited Partnership
question
A limited partnership is a creature of statute, because it does not come into existence until a _____ is filed with the appropriate state office.
answer
certificate of limited partnership
question
A partner who assumes responsibilty for the management of the partnership and liability for its debts.
answer
General Partner
question
A partner who contributes capital to the partnership but has no right to participate in the management or operation of the business and assumes no liability for partnership beyond the capital contributed.
answer
Limited Partner
question
One of the major benefits of becoming a limited partner is this ______.
answer
limitation on liability
question
A form of partnership that allows professionals to enjoy tax benefits of a partnership while limiting their personal liability for the malpractice of other partners.
answer
Limited Liability Partnership (LLP)
question
The major advantage of the LLP is that it allows a partnership to continue as a ____ for tax purposes, but limits the liability of partners.
answer
pass-through entity
question
A major disadvantage of the general partnership is the _____ of its owner-partners.
answer
unlimited personal liability
question
A hybrid form of business enterprise that offers the limited liability of the corporation but the tax advantages of a partnership.
answer
Limited Liability Company (LLC)
question
This business form is governed by the state ____.
answer
LLC statutes
question
A person who has an ownership interest in a limited liability company.
answer
Member
question
The document filed with a designated state official by which a limited liability company is formed.
answer
Articles of Organization
question
To form an LLC, articles of organization must be filed with a ____ agency --- usually the _____ office.
answer
State/ secretary of state's
question
The business's name must include the words "Limited Liability Company" or the initials "LLC"
answer
...
question
A key advantage of the LLC is that the liability of members is limited to the amount of their ____.
answer
investments
question
An LLC that has _____ can choose to be taxed either as a partnership or as a corporation.
answer
two or more members
question
In a limited liability company, an agreement in which the members set forth the details of how the business will be managed and operated.
answer
Operating Agreement
question
There are two options for managing an LLC:
answer
member-managed/manager-managed
question
A legal business form that complies with statutory requirements.
answer
Corporation
question
Corporations are owned by:
answer
Shareholders
question
The corporations existence as a legal entity, which can be perpetual, depends generally on ____.
answer
state law
question
One of the key advantages of the corporate form of business is that the liability of its owners (shareholders) is limited to their ___.
answer
investments
question
The corporate entity pays taxes on the firms ____, and when income is distributed to shareholders, the shareholders again pay taxes on that income.
answer
income
question
A business corporation that qualifies for special income tax treatment.
answer
S Corporation
question
As in a partnership, the income is taxed only ___.
answer
once
question
The document filed with the appropriate governmental agency, usually the secretary of state, when a business is incorporated.
answer
Articles of Incorporation
question
A set of governing rules adopted by a corporation or other association
answer
Bylaws
question
Corporations can do one of two things with corporate profits: retain them or pass them on to shareholders in the form of ____.
answer
dividends
question
A distribution to corporate shareholders of corporate profits or income, disbursed in proportion to number shares held.
answer
Dividend
question
Another import aspect of corporate taxation is that corporate profits can be subject to ____.
answer
double taxation
question
The proportion of a corporations profits that has not been paid out as dividends to shareholders.
answer
Retained Earnings
question
It also has the right of due process before denial of life, liberty, or property, as well as freedom from unreasonable searches and seizures and from double jeopardy.
answer
Constitutional Rights of Corporations
question
One of the hallmarks of the corporate organizations is that shareholders are not personally liable for the debts of the corporation.
answer
Liabilities of Shareholders
question
Bonus: To disregard the corporate entity and hold the shareholders personally liable for a corporate obligation.
answer
Pierce the Corporate Veil
Business
Debts And Obligations
Economics
Legal Management
Long Term Bonds
Uniform Partnership Act
Chapter 8 Free Enterprise – Flashcards 50 terms

Brooke Sharp
50 terms
Preview
Chapter 8 Free Enterprise – Flashcards
question
What is the most common form of a business organization in the US?
answer
Sole Proprietorships
question
What percentage of all businesses in the US are sole proprietorships, according to the IRS?
answer
75%
question
Are most sole proprietorships large, medium, or small in size of revenue generation? What percentage of US sales do sole proprietorships generate?
answer
Small- only 6%
question
What is the most popular type of firm in the US?
answer
Sole Proprietorship
question
Is a sole proprietorship easy to establish?
answer
Yes
question
__ __-__ is one of the main advantages of a sole proprietorship.
answer
Easy Start-up
question
Just about anyone can start a sole proprietorship if your are willing to complete a small amount of __ and pay the __ expense to start the business.
answer
Paperwork, legal
question
The paperwork only takes a __ or __ to complete.
answer
Day, two
question
Sole proprietorships typically must meet three minimum requirements:
answer
Authorization (business license), site permit, name of business
question
What form of business is the least regulated?
answer
Sole Proprietorship
question
Name two kinds of regulations that a sole proprietorship might subject to follow:
answer
Health codes, zoning laws
question
Who gets to keep all of the profits (after taxes) in a sole proprietorship?
answer
The owner of the business
question
How does the ability to make fast, flexible decisions benfit a sole proprietor?
answer
It allows them to take full advantage of sudden opportunities
question
If a sole proprietor wants to discontinue their business, they must first: a) pay any __ b) any other obligations like __
answer
debts, taxes
question
List three major disadvantages of sole proprietorships:
answer
Unlimited personal liability, limited access to resources, lack of permanence
question
an estaqblishment formed to carry on commercial enterprise
answer
Business organization
question
a business owned and managed by a single individual
answer
sole proprietorship
question
authorization to start a business issued by the local government
answer
business license
question
law in a city or town that designates separate areas for residency and for business
answer
zoning laws
question
the legally bound obligation to pay any debts
answer
liability
question
payment other than wages or salaries
answer
fringe benefit
question
a business owned by two or more persons who agree on a specific division of responsibilities and profits
answer
partnership
question
partnership in which partners share equally in both responsibility and liability
answer
general partnership
question
partnership in which only one partner is required to be a general partner
answer
limited partnership
question
partnership in which all partners are limited partners
answer
Limited Liability Partnership (LLP)
question
a partnership agreement
answer
articles of partnership
question
act ordering common ownership interests, profit and loss sharing, and shared management responsibilities in a partnership
answer
Uniform partnership act (UPA)
question
money and other valuables belonging to an individual or business
answer
assets
question
a legal entity owned by individual stockholders
answer
corporation
question
a certificate of ownership in a corporation
answer
stock
question
a formal contract to repay borrowed money with interest at fixed intervals
answer
bond
question
the portion of corporate profits paid out to stockholders
answer
dividend
question
the combination of two or more firms involved in different stages of producing the same good or service
answer
vertical merger
question
share of earnings given as a payment
answer
royalties
question
retail outlet owned and operated by consumers
answer
consumer cooperative
question
cooperative that provides a service, rather than a good
answer
service cooperative
question
agricultural marketing cooperative that helps members sell their products
answer
producer cooperative
question
institution that functions much like a business, but does not operate for the purpose of generating profits
answer
nonprofit organization
question
nonprofit organization that works to improve the image, working conditions, and skill levels of people in particular occupations
answer
professional organization
question
nonprofit organization that promotes collective business interests for a city, state, or other geographical area, or for a group of similar businesses
answer
business association
question
nonprofit organzation that promotes the interests of a particular industry
answer
trade association
question
Partnerships agree on a specific __ of __ and __.
answer
division, responsbility, profits
question
In the US, partnerships account for about __ percent of all business.
answer
7
question
Partnerships generate about __ percent of all sale and about __ percent of all income
answer
5, 10
question
What is the most common type of partnership?
answer
General Partnership
question
In a limited liability partnership __ partners are limited partners.
answer
all
question
What are the four most common types of LLPs?
answer
Attorneys, physicians, dentists, accountants
question
Limited liability partners are not usuall liable for other partner's __.
answer
Mistakes
question
How does a corporation differ from a sole proprietorship or partnership?
answer
Corporations continue after the death of their owners and are owned by shareholders
question
How does a business franchise work?
answer
It pays fees to a parent company in order to sell its goods in a specific area
Business
Debts And Obligations
Models
Product Design
Separate Legal Entity
Skills And Abilities
Strengths And Weaknesses
EEE Final – Flashcards 128 terms

Will Walter
128 terms
Preview
EEE Final – Flashcards
question
What does a business model represent?
answer
The core aspects of a business and how they fit together.
question
Standard Business Model
answer
Depict existing plans firms can use to determine how they will create, deliver and capture value for their stakeholders.
question
Disruptive Business Model
answer
Business Models that don't fit the profile of a standard business models, and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within the industry
question
New Market Disruption
answer
Addresses a market that previously wasn't served
question
Low-End Market Disruption
answer
Disrupts market by providing a simple "low cost" alternative to incumbent businesses
question
Core Strategy (1st component of Barringer/Ireland Business Model Template)
answer
Describes how the firm plans to compete relative to its competitors
question
Primary elements of Core Strategy
answer
- Business mission - Basis of Differentiation - Target Market - Product/Market Scope
question
Business Mission
answer
A business mission or mission statement describes why it exists and what its Business Model is supposed to accomplish.
question
Basis of Differentiation
answer
Why consumers pick one company's products over another's.
question
Target Market
answer
A place within a larger market segment that represents a narrow group of customers with similar interests.
question
Product/Market Scope
answer
Defines the products and markets on which a company will concentrate on. (Most firms start with a narrow scope and become larger).
question
Resources (2nd component of Barringer/Ireland Business Model Template)
answer
The inputs a firm uses to produce, sell, distribute, and service a product or service. A firms most important resources must be difficult to imitate and hard to find a substitute for.
question
Core Competencies (resources)
answer
A specific factor or capability that supports a firm's business model and sets it apart from rivals. (technical know-how, efficient process, trusting relationship with customers, expertise in product design)
question
Key Assets
answer
The assets that a firm owns that enable its Business Model to work. (physical-equipment, financial-investors, intellectual-trademarks, or human-employees)
question
Financials (3rd component of Barringer/Ireland Business Model Template)
answer
Only section of a firm's Business Model that describes how it earns money.
question
Revenue Streams
answer
Describes the ways in which a firm makes money, can be single or have several.
question
Cost Structure
answer
Describes the most important costs incurred to support its Business Model
question
Goal of Cost Structure
answer
Identify: -cost-driven or value-driven -nature of business's costs - business's major cost categories
question
Financing/Funding
answer
Indicate the appropriate amount of funding that will be needed and where the money will come from. Approximation is sufficient in the Business Model stage, don't need an exact amount.
question
3 categories of costs to consider
answer
1. Capital costs 2. One-time expenses 3. Provisions for ramp up expenses
question
Operations (4th component of Barringer/Ireland Business Model Template)
answer
Integral to a firm's overall Business Model and represent the day-to-day heartbeat of a firm.
question
Product (or service) Production
answer
How products/services are produced. Manufactured or in-house produced
question
Channels
answer
How the product/service is delivered to customers
question
Key Partners
answer
Final element of a business model If a start-up firm doesn't have sufficient resources or funding to perform all the tasks to make the Business Model work, they rely on key partners to perform important roles.
question
Types of Business Partnerships
answer
- Joint Venture - Network - Consortia - Strategic alliance
question
What is Entrepreneurship?
answer
"The pursuit of opportunity without regard to the resources currently controlled"
question
Entrepreneurial Mindset
answer
The fixed set of attitudes, dispositions and traits that positively incline a person to think, act and behave in an entrepreneurially manner and predetermines a person's response to and interpretation of various situations
question
How firms behave in an Entrepreneurial Mindset
answer
All firms fall on a conceptual continuum that ranges from highly conservative to highly entrepreneurial- a firms position on the continuum is its "entrepreneurial intensity"
question
Entrepreneurial Firms
answer
Are proactive, innovative, and risk taking
question
New venture startup process
answer
1. Decision to become an entrepreneur 2. Developing successful business ideas 3. Moving from an idea to an entrepreneurial firm 4. Managing and growing the entrepreneurial firm
question
What Prevents people from behaving in an entrepreneurial manner?
answer
Hierarchical structures where failure is frowned upon there is a misconception that there is no need for hard work, and society is becoming less risk taking
question
Outcomes of Entrepreneurial Process
answer
Creativity Opportunity recognition Responsible risk taking Self awareness
question
Where do opportunities come from?
answer
- Changing environmental trends - Solving Problems - Filling gaps in the marketplace
question
Changing Environmental Trends
answer
ex: aging of population, increasing diversity, social network participation increasing, growth in use of mobile devices, more focus on health and wellness
question
Solving a Problem
answer
by observing the challenges that people experience in their daily lives. OR through more simple means, such as intution, or chance
question
Finding gaps in the Marketplace
answer
Products consumers need or want that aren't available in a particular location or aren't available at all
question
How are opportunities recognized?
answer
Exploring, watching people, asking questions, journal problems and possibilities, be open-minded, be confident
question
What type of risk taker is a business owner?
answer
A "moderate" risk taker. Responsible business owners take well informed calculated risks. See their business as a secondary or acceptable risk in their lives.
question
Endowment Effect
answer
People place a higher value on things they own opposed to equivalent or even superior things they don't own. (Very powerful urge among people to protect what they already possess, even though something of greater value may be within their reach)
question
Risk Aversion
answer
Refers to the tendency for people to strongly prefer avoiding losses rather than acquiring gains.
question
Factors that help overcoming the fear of risk taking
answer
-aware of emotional reactions -identify particular challengs -recognize traditional thoughts -educate yourself on facts -calculate each risk -practice taking risks
question
Researching the business opportunity
answer
Taking time to learn the ins and outs of an opportunity is largely what makes business owners moderate rather than high risk-takers
question
3 approaches to researching opportunities
answer
1. get advice from experts and informed people 2. gather information about opportunity 3. conduct a feasibility analysis and write a comprehensive business plan
question
How to determine what you want in your life
answer
-look at life holistically -is what you want only satisfied from starting your own business?
question
How to overcome the endowment effect and risk aversion
answer
-determine what you want in your life -having a good sense of "whats the worst thing that can happen if the business fails" -research and test the business idea
question
Joint Venture Business Partnership
answer
2 or more firms
question
Network Business Partnership
answer
hub-and-wheel configuration with a local firm at the hub
question
Consortia Business Partnership
answer
group of organizations with similar needs
question
Strategic alliance Business Partnership
answer
2 or more firms establish exchange relationship
question
3 Phases of the Entrepreneurial Mindset
answer
1. Recognize opportunities 2. Assess opportunities 3. Execute and realize opportunities
question
What are the components of the Barringer/Ireland Business Model Template?
answer
Core strategy resources sales operations
question
Quadrant A of the HBDI Model?
answer
Analytical and logical
question
Quadrant B of the HBDI Model?
answer
organized and planned
question
Quadrant C of the HBDI Model?
answer
sensing and emotional
question
Quadrant D of the HBDI Model?
answer
experimenting and abstract
question
What is a Business Model?
answer
It's the architecture, the frame, the overall view of your business.
question
Cost Driven
answer
leanest cost structure, low price value proposition, maximum automation, extensive outsourcing.
question
Value Driven
answer
focused on value creation, premium value proposition.
question
Opportunity recognition
answer
Important component of the entrepreneurial process. Entrepreneurs are often characterized by their ability to recognize opportunities. The most basic entrepreneurial actions involve the pursuit of opportunity
question
MBTI where you focus your attention
answer
Extraversion or Intraversion
question
MBTI which way you take in information
answer
Sensing or Intuition
question
Sensing
answer
People who tend to take in information through the five senses and focus on the here and now.
question
Intuition
answer
People who tend to take in information from patterns and the big picture and focus on future possibilities
question
Extraversion
answer
People who tend to focus on the outer world of people and activity.
question
Introversion
answer
People who tend to focus on the inner world of ideas and impressions.
question
MBTI which way you make decisions
answer
Thinking or Feeling
question
Thinking
answer
People who make decisions based primarily on logic and on objective analysis of cause and effect.
question
Feeling
answer
People who tend to make decisions based primarily on values and on subjective evaluation of person-centered concerns.
question
MBTI how you deal with the outer world
answer
Judging or Perceiving
question
Judging
answer
People who tend to like a planned and organized approach to life and want to have things settled.
question
Perceiving
answer
People who tend to like a flexible and spontaneous approach to life and want to keep their options open.
question
How to establish a Strong Ethical Culture
answer
Lead by Example Establish a Code of Conduct Implement an Ethics Training Program
question
New Venture Team
answer
Group of founders, key employees, and advisors that move a new venture from an idea to a fully functioning firm.
question
Bootstrapping
answer
Finding ways to avoid the need for external financing or funding through creativity, ingenuity, thriftiness, cost cutting, or any means necessary. Many entrepreneurs bootstrap out of necessity.
question
Venture Capital
answer
Money that is invested by venture capital firms in start-ups and small businesses with exceptional growth potential
question
Vendor Credit
answer
(AKA trade credit) when a vendor extends credit to a business in order to allow the business to buy its products and/or services up front but defer payment until later.
question
Marketing (academic definition)
answer
An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
question
Marketing (practical definition)
answer
Involves motivating (qualified) people to enter your sales funnel, converting prospects to customers, and managing customer and prospect relationships on an ongoing basis
question
Marketing Strategy
answer
A firm's approach to marketing its products and services in broad terms. This approach forms the basis of all its marketing-related activities.
question
Positioning Strategy
answer
After selecting a target market, the next step is for a firm to select a "position" in the market. Position is concerned with how a firm is situated relative to its rivals (or potential rivals). In a sense, a position is the part of a specific target market that a firm is claiming for its own.
question
Key elements of Resources
answer
Core competency Key assets
question
Key elements of Financials
answer
Revenue streams Cost Structure Financing/funding
question
Key Elements of Operations
answer
Product (or service) production Channels Key partnerships
question
What are the four key elements of the entrepreneurial mindset?
answer
Opportunity recognition, creativity, responsible risk taking, self awareness
question
What are the three steps to the entrepreneurial process?
answer
Ability to recognize opportunities, ability to assess opportunities, ability to execute opportunities
question
Where do opportunities come from?
answer
Changing environmental trends, solving problems, filling gaps in the marketplace.
question
What is the entrepreneurial mindset?
answer
The fixed set of attitudes, dispositions and traits that positively incline a person to think, act, and behave in an entrepreunrially manner
question
What is the new venture startup process?
answer
Decision to become an entrepreneur>developing successful business ideas>moving from an idea to an entrepreneurial firm>managing and growing the entrepreneurial firm
question
HBDI Blue- quadrants definition
answer
analytical, rational. Green- planning, organized. Red- sensing, emotional. Yellow- synthesizing, intuitive.
question
HBDI Blue- quadrant strengths
answer
solves or fixes a problem
question
HBDI Red- quadrant strengths
answer
allows group to better improve as a team.
question
HBDI Yellow- quadrant strengths
answer
opens up future possibilities.
question
HBDI Green- quadrant strengths
answer
helps get the task done.
question
HBDI quadrant questions
answer
asks why?
question
HBDI Green- quadrant questions
answer
asks how many or how much?
question
HBDI Red- quadrant questions
answer
asks who and for whom?
question
HBDI Yellow- quadrant questions
answer
asks how and what if?
question
Extrovert characteristics
answer
Outer world, talks
question
Introvert characteristics?
answer
Inner world, quiet
question
Sensing characteristics?
answer
Take in information through the senses and focus on here and now
question
Intuition characteristics?
answer
Information through the big picture and focus on future possibilities
question
Thinking characteristics?
answer
Make decisions based on logic and cause and effect
question
Feeling characteristics?
answer
Make decisions based on values and person-centered concerns
question
Judging characteristics?
answer
Planned and organized approach to life
question
Perceiving characteristics?
answer
Flexible and spontaneous
question
What are the factors of establishing a strong ethical culture?
answer
Lead by example, establish a code of conduct, implement an ethics training program
question
What are the common forms of legal entity?
answer
Sole proprietorship, partnership, corporation, limited liability company
question
What is a new venture team?
answer
A group of founders, key employees, and advisors that move a new venture from an idea to a fully functioning firm
question
Advantages of a venture team?
answer
Teams bring more talent, broader network, and psychological support
question
Disadvantages of a venture team?
answer
Team members may not get along, formal structure may be compromised by "equal" employees
question
What is a skills profile?
answer
A chart that depicts the most important skills that are needed and where skills gaps exist in a new firm
question
What are the three formal responsibilities of the board of directors?
answer
Appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation
question
Why do new ventures need financing?
answer
Cash flow challenges, capital investments, lengthy product development cycles
question
Alternatives for raising money for a new venture?
answer
Personal funds, equity capital, debt financing, creative sources
question
What is bootstrapping?
answer
Finding ways to avoid need for external financing through creativity, cost cutting, thriftiness (buying used equipment)
question
Equity funding vs. debt financing
answer
Equity is exchanging partial ownership in a firm, such as stock, for funding. Debt is getting a loan
question
What is an elevator speech?
answer
Brief, contracted statement that outlines the merits of a business opportunity (2 minute pitch)
question
Sources of equity funding?
answer
Venture capital, business angels, IPOs.
question
What are business angels?
answer
Shark tank
question
What are venture capital firms?
answer
Firms who fund very few start ups who show exceptional growth
question
Sources of debt financing?
answer
Commercial banks, SBA guaranteed loans (guaranteed loan for small businesses who can't get money anywhere else
question
What is marketing?
answer
An organizational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
question
What is marketing (practical definition)?
answer
Motivating qualified people to enter your sales funnel, converting prospects into customers and managing customer and prospect relationships on an ongoing basis
question
What is positioning strategy?
answer
Concerned with how a firm is situated relative to its competitors and what part of the market it is going to be involved in
question
Sections of the BMC?
answer
Core strategy, resources, financials, operations
question
HBDI Green- quadrants definition
answer
planning, organized.
question
HBDI Red- quadrants definition
answer
sensing, emotional.
question
HBDI Yellow- quadrants definition
answer
synthesizing, intuitive.
Business
Business Management
Debts And Obligations
Foreign Corrupt Practices Act
Limited Liability Partnership
Principles Of Marketing
Intro to Business Quiz Questions for Exam 1 – Flashcards 31 terms

Noah Thomson
31 terms
Preview
Intro to Business Quiz Questions for Exam 1 – Flashcards
question
Business will incur a _____ when expenses are higher than revenue
answer
Loss
question
Business transactions that occur online are examples of:
answer
e-commerce
question
Doing business today without harming the ability of future generations to meet their needs is referred to as:
answer
sustainability
question
Nonprofit organizations are not in the business of:
answer
financial gain
question
A product has value when its benefits to the customer are equal to or greater than the price that the customer pays.
answer
True
question
An economic system is a structure for:
answer
allocating limited resources.
question
A market structure with pure competition has all of the following characteristics EXCEPT:
answer
the firms use product differentiation allowing consumers to easily identify their favorite brands.
question
A federal agency called the _____ was established to protect customer deposits in banks and thrift institutions for up to $100,000 per customer, per bank.
answer
Federal Deposit Insurance Corporation (FDIC)
question
A basic characteristic of _____ is that both producers and consumers are free to make their own economic decisions on many basic issues.
answer
capitalism
question
_____ is a period of robust economic growth and high employment indicating that businesses are capitalizing on new market opportunities.
answer
expansion
question
A trade _____ occurs when a country imports more goods and services than it exports.
answer
deficit
question
Foreign _____ involves a firm buying the rights to produce, promote, and use the domestic firm's trademark/patents in a defined geographical area as long as there is an agreement on specific operating procedures.
answer
licensing
question
What is meant by the balance of trade?
answer
It is a measure of the difference between exports and imports.
question
When a country lacks hard currency it must use _____ to complete international trade.
answer
countertrade
question
Which of the following would be an appropriate reason for a country to eliminate trade restrictions?
answer
To increase domestic jobs in industries with a comparative advantage versus other countries
question
Socially responsible employers:
answer
ensure that hard work, commitment, and talent pay off.
question
A _____ is the systematic evaluation of how well a firm is meeting its goals of ethics and social responsibility.
answer
social audit
question
A person who reports illegal or unethical behavior within an organization is known as a:
answer
whistle-blower.
question
Stakeholders are:
answer
groups or individuals with a personal interest in the performance and actions of a business.
question
Which of the following illustrates a true ethical dilemma?
answer
Jack has to cover for his manager who has been stealing from the cash register or else he will lose his job.
question
_____ are by far the most common type of business organization in the United States.
answer
Sole proprietorships
question
A "spin-off" is a common type of _____.
answer
divestiture
question
Cathy and Denise open a business as a limited liability partnership in a state that offers partial-shield protection. From Cathy's perspective, this means that she:
answer
has unlimited liability for most types of debts the firm incurs, but she is protected from any debts that result from Denise's negligence or malpractice.
question
Stockholders are _____ of a corporation. Common stockholders have the right to vote on issues affecting the operation of the business.
answer
owners
question
The party in a franchise relationship that pays for the right to use resources supplied by another business entity is known as the _____.
answer
franchisee
question
_____ are wealthy individuals who invest in new and growing firms.
answer
Angel investors
question
A possible drawback when buying an existing business is that:
answer
you may inherit the mistakes made by the previous owner.
question
Entrepreneurs tend to be tolerant of:
answer
uncertainty; they view business uncertainty as something they can turn to their advantage.
question
People with a(n) _____ have a strong sense of personal responsibility for what happens in their lives.
answer
internal locus of control
question
A(n) _____ is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives.
answer
business plan
question
A(n) _____ is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives.
answer
business plan