Question

End of Chalpl Answer True (T) or False (F): 1. A business owned by one person is called a corporation 3. Investment capital is the money needed to start a business. 4. When loaning money, the lender usually requires the borrower to -2. Inventory means the supply of products a store sells. have somethi ing of value to guarantee that the loan will be repaid. loans usually do not require collateral. ness 5. Unlike 6. In a general partnership, all partners are joint owners of the busi and are legally responsible for the business's debts 7. In a limited partnership, all partners share equally the decision- making power for the business. _ 8, Most businesses in the United States today are sole proprietorships. 9. Sole proprietorships tend to be small. 10. Sole proprietorships account for a very high percentage of retail sales in the United States today. 11. Owners of sole proprietorships in the U.S. are likely to be successful. 12. Most businesses organized as partnerships in the United States are small and require small amounts of investment capital. 13. Businesses offering professional services, such as doctors or lawyers, 14. Businesses often incorporate to raise more investment capital. 15. The owners of a corporation are called the board of directors. 16. In the eyes of the law, a corporation is treated as a separate individual. common examples of partnerships. are 17. Stockholders in a corporation receive bonds showing how many shares of the company they own. 18. A dividend is a share ofa company's profits paid to stockholders. 19. A mutual fund is a com 20. People who invest in stocks of a blue-chip company are guaranteed pany that buys stock in other companies. to make a profit on their investment. 89

Answer 1

1) Solution: False

Explanation: A sole proprietorship is a form of business which is owned by one person

2) Solution: False

Explanation: There are three types of inventory; and finished inventory refers to the goods available for sale

3) Solution: False

Explanation: Capital investment refers to funds invested in a a company for the purpose of furthering its business objectives

4) Solution: True

Explanation: The lender usually requires the borrower to provide a guarantee that the loan will be repaid

5) Solution: False

Explanation: Business loans are usually secured with collateral, thus an asset is already pledged by the borrower to the lender for the life of the loan.

6) Solution: True

Explanation: In General Partnerships, all of the partners are equally responsible for the business's debts as well as liabilities.

7) Solution: False

Explanation: The limited partner will not have the powers of decision-making like a general partner.

8) Solution: True

Explanation: The sole proprietorship is the most simplest and common type of business operating in the America

9) Solution: False

Explanation: The sole proprietorship is the most simplest and common type of business operating in the America

10) Solution: True

Explanation: In U.S. sole proprietorships account for a very high percentage in retail sales