CHAPTER THREE (TEST – True or False)

A. PLEASE ANSWER TRUE OR FALSE. WRITE THE COMPLETE WORD TRUE OR FALSE.

1. A sole proprietorship is the most popular type of business organization in the United States.

2. Employment taxes include Social Security taxes, Medicare taxes, and federal unemployment taxes.

3. An entrepreneur is a person who decides how to combine resources to create goods and services.

4. A business license is the legal obligation to pay debts.

5. The least common type of business partnership is the general partnership.

6. Fringe benefits are payments to employees of wages or salaries.

7. The biggest disadvantage of sole proprietorship is unlimited personal liability.

8. One advantage of sole proprietorships is that they are exempt from zoning laws.

9. A partnership is the most popular type of business organization in the United States.

10. Partnerships are a good choice of business organization if owners are willing to share both the responsibility of running the business and the economic right to enjoy the profits it earns.

11. Federal law requires a written partnership agreement for a limited liability partnership.

12. General partnerships have fewer disadvantages than limited liability partnerships.

13. In a sole proprietorship, the partners have the burden of making all business decisions.

14. Partnerships are subject to little government regulation.

15. A limited partnership must have at least one general partner.

16. The Articles of Partnership is a legal document that spells out each partner’s economic rights and responsibilities in the partnership.

17. In a partnership only the main partner contributes assets, or money and other valuables to the partnership.

18. One of the advantages of franchises is centralized buying power.

19. In a business franchise agreement, the parent company is called a franchiser.

20. Management training and support is one of the advantage of franchises.

21. Each person who owns stock is a part-owner of a corporation.

22. A corporation has a legal identify separate from the identities of its owners.

23. A corporation that has many shareholders who can buy or sell stock on the open market is called a publicly held corporation.

24. A corporation that issues stocks to only a few people, often family members, who rarely trade their stock on the open market, is called a closely held corporation.

25. Businesses that wish to incorporate must first file for a state license known as a Certificate of Incorporation, or Corporate Charter with state officials.

26. Corporations are exempt from paying taxes on their income.

27. Individual stockholders do not carry personal responsibility for the corporation’s actions.

28. Multinational corporations must obey laws in each country in which they operate.

29. A corporation can grow by selling stocks or bonds, merging, or
combining, with another corporation.

30. Sole proprietorships are subject to little government regulation.

E N D

I have provided true or false below.          

Explanation:

1. This is TRUE.

A sole proprietorship is the most popular type of business organization in the United States.  It is a True statement.

2. This is TRUE.

Employment taxes include Social Security taxes, Medicare taxes, and federal unemployment taxes. It is a true statement.

3. This is FALSE.

An entrepreneur is a person who decides how to combine resources to create goods and services. It is a false statement.

4. This is FALSE.

A business license is the legal obligation to pay debts.  It is a false statement.

5. This is FALSE.

The least common type of business partnership is the general partnership.  It is a false statement.

6. This is TRUE

Fringe benefits are payments to employees of wages or salaries. It is a true statement.

7. This is TRUE.

The biggest disadvantage of sole proprietorship is unlimited personal liability. It is a true statement.

8. This is FALSE

One advantage of sole proprietorships is that they are exempt from zoning laws.  It is a false statement.

9.  This is FALSE

A partnership is the most popular type of business organization in the United States.  It is a false statement.

10. This is TRUE

Partnerships are a good choice of business organization if owners are willing to share both the responsibility of running the business and the economic right to enjoy the profits it earns. It is a true statement.

11.  This is FALSE.

Federal law requires a written partnership agreement for a limited liability partnership.  It is a false statement.

12. This is FALSE.

General partnerships have fewer disadvantages than limited liability partnerships.  It is a false statement.

13. This is FALSE.

In a sole proprietorship, the partners have the burden of making all business decisions.  It is a false statement.

14. This is FALSE.

Partnerships are subject to little government regulation.  It is a false statement.

15.  This is TRUE.

A limited partnership must have at least one general partner. It is a true statement.

16.  This is TRUE.

The Articles of Partnership is a legal document that spells out each partner’s economic rights and responsibilities in the partnership. It is a true statement.

17.   This is FALSE

In a partnership only the main partner contributes assets, or money and other valuables to the partnership.  It is a false statement.

18.  This is FALSE.

One of the advantages of franchises is centralized buying power.  It is a false statement.

19.   This is TRUE.

In a business franchise agreement, the parent company is called a franchiser. It is a true statement.

20.  This is TRUE.

Management training and support is one of the advantage of franchises. It is a true statement.

21.  This is TRUE.

Each person who owns stock is a part-owner of a corporation. It is a true statement.

22. This is TRUE.

A corporation has a legal identify separate from the identities of its owners. It is a true statement.

23. This is TRUE.

A corporation that has many shareholders who can buy or sell stock on the open market is called a publicly held corporation. It is a true statement.

24. This is FALSE.

A corporation that issues stocks to only a few people, often family members, who rarely trade their stock on the open market, is called a closely held corporation.  It is a false statement.

25. This is TRUE.

Businesses that wish to incorporate must first file for a state license known as a Certificate of Incorporation, or Corporate Charter with state officials. It is a true statement.

26. This is TRUE.

Corporations are exempt from paying taxes on their income. It is a true statement.

27. This is FALSE.

Individual stockholders do not carry personal responsibility for the corporation’s actions.  It is a false statement.

28. This is TRUE.

Multinational corporations must obey laws in each country in which they operate. It is a true statement.

29. This is TRUE.

A corporation can grow by selling stocks or bonds, merging, or

combining, with another corporation. It is a true statement.

30. This is FALSE.                                

Sole proprietorships are subject to little government regulations. It is a false statement.                                    

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