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

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

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

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

5. A business owned by one person is a corporation.
FALSE

6. A hair salon is a service business.
TRUE

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

8. 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

9. 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

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

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

12. A church and a school are non profit organizations.
TRUE

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

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

15. Corporations provides a service and do not pay taxes.
FALSE

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

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

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

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

20. Taco Bell is an example of a franchise.
TRUE

21. Service businesses perform tasks rather than provide goods.
TRUE