Types of Business Ownership Chapter 6 Exam Review Types of Business Ownership True or False

A disadvantage of having a partner is if you do not get along with one another. TRUE

A non profit organization will have to pay taxes if they earn over one million dollars. FALSE

An intermediary is a business that moves goods from one business to another. TRUE

A business owned by one person is a corporation. FALSE

A hair salon is a service business. TRUE

When groups of businesses, such as small farms, pool their resources, they form a non profit organization. FALSE - cooperative

A franchise makes a contractual agreement to use the name and sell the products or services of a company in a designated geographic area. TRUE

TRUE – example; Ocean Spray is a cooperative of cranberry growers Cooperatives are organizations that are owned and operated by its members. TRUE – example; Ocean Spray is a cooperative of cranberry growers

A retailer purchases goods from a wholesaler and sells them to consumers. TRUE

Three primary forms of business ownership are sole proprietorships, partnerships and corporations. TRUE

A church and a school are non profit organizations. TRUE

A disadvantage of being a sole proprietor is you have unlimited liability. TRUE

Processor changes raw materials into more finished products Processor changes raw materials into more finished products. Example Sugar cane is turned into sugar. TRUE

Corporations provides a service and do not pay taxes. FALSE

The advantages of having a partnership is that it is easier to obtain capital. TRUE

Wholesalers will turn raw or processed goods into finished goods. FALSE - manufacturer

Service businesses employ about 1/2 of the workforce and are rapidly increasing in numbers. FALSE – 3/4

TRUE – also called distributors A wholesaler distributes goods. TRUE – also called distributors

Taco Bell is an example of a franchise. TRUE

Service businesses perform tasks rather than provide goods. TRUE