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Unit 4 Review- Business Organizations 1. What term is defined as an enterprise that produces good or services, usually to make a profit? Business organization 2. A business that does not continue if the owner leaves limited life 3. What do many people consider to be the chief advantage of sole proprietorship? The owner keeps all the profits 4. What is a business owned and managed by a single person called? Sole proprietorship 5. What is the term for a business that is co-owned by two or more people who agree on how responsibilities, profits and losses will be divided? Partnership 6. What is the term for a business in which non of the co-workers is responsible for the debts or mistakes of the others? Limited liability partnership 7. What is the advantage of partnership but not of sole proprietorship? Specialization of skills 8. What is the disadvantage of partnership but not of sole proprietorship? Potential for conflict 9. What is the name for an individual who owns a share of a corporation and is entitled to part of its profits? Stockholder 10. _______ is a corporation that issues stock that can be freely bought and sold? Public corporation 11. What is one of the major disadvantages of corporations? Loss of control 12. What is it called when companies that produce the same product merge? Horizontal merger 13. What is the name for a contract in which a corporation promises to repay borrowed money, plus interest, on a fixed schedule? Bond 14. Angela opens a coffee shop, which she owns and where she sells a national brand of gourmet coffee. She pays licensing fees to do this. What kind of business is it? Franchise 15. The owner has total responsibility for all business decisions and financial obligation is an advantage, disadvantage or both of sole proprietorships? Both 16. A dry cleaning business is most likely to be a _____? Sole proprietorship 17. Obtaining a ______ is typical startup requirement for a sole proprietorship? Business license 18. One partner is a bookkeeper, and the other is a gourmet chef. This is an example of ____ in partnership? Specialization 19. Three certified public accountants form an accounting firm by pooling their investment money. No one wants to be responsible if one of the others makes a serious financial error. What type of firm will they choose? Limited liability partnership 20. What is the part of the corporate profits paid to a stockholder? Dividend 21. Unlimited life and limited liability are advantages that _____ have over sole proprietorships and partnerships. Corporations 22. Who is responsible for the smooth day-to-day running of a corporation? Corporate officers Unit 4 Review- Business Organizations 23. What is it called when several companies producing unrelated products merge? Conglomerate 24. A shirt factory acquires a button manufacturer. This is an example of a _______. Vertical merger 25. A restaurant that is part of a national chain is an example of a ____. Franchise 26. If a firm has no employees, what form of business organization is it most likely to have? Sole proprietorship 27. A business owned by shareholders, who own the rights to the company’s profits but face limited liability. Corporation 28. The result of a merger of several companies, each one producing unrelated goods or services conglomerate 29. Shares of ownership in a corporation stocks 30. The combining of two or more companies that produce the same product of similar products horizontal merger 31. A large corporation with branches in several countries multinational corporation 32. Part of a corporation’s profits that is paid out to stockholders dividend 33. The combining of companies involved in different steps of producing or marketing a product. Vertical merger 34. A corporation that issues stock that can be freely bought and sold. Public company 35. A contract issues by a corporation that promises to replay borrowed money, plus interest, on a fixed schedule. Bond 36. A corporation that controls who can buy or sell their stock private company 37. Which of the following are characteristics of sole proprietorship? Limited life and limited liability 38. What financial difficulty do people often face when opening a sole proprietorship? Limited funds for startup 39. A dog grooming service is most likely to be a _____. Sole proprietorship 40. What often happens when the owner of a sole proprietorship dies? The business closes down 41. A business in which the partners share management and liabilities is a ___? General partnership 42. A doctor’s office is mostl likely to be a _____ partnership? Limited liability 43. What are some of the advantages that partners can bring to a business? Extra funds and specialized knowledge 44. A service stat