Quiz To Test Your Knowledge Of Business Ownership!

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Quizzes Created: 1 | Total Attempts: 1,352

Questions: 8 | Attempts: 1,352 | Updated: Jul 26, 2024

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Quiz To Test Your Knowledge Of Business Ownership! - Quiz

A multiple choice quiz to test your knowledge of business ownership!

Questions and Answers

1.

Which of these companies is a franchise?
- A.
  
  New Look
- B.
  
  Zeb's
- C.
  
  Subway
- D.
  
  Odeon Cinema
Correct Answer
C. Subway

Explanation
Subway is a franchise because it is a well-known fast-food chain that operates through a franchise model. This means that individuals can purchase a franchise from Subway and operate their own Subway restaurant while following the company's established guidelines and using its brand name. This allows Subway to expand its business through independent owners who pay fees and royalties to the company in exchange for the right to operate under the Subway brand.

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2.

Which of these is not a benefit of franchising?
- A.
  
  The franchisee benefits from national advertising
- B.
  
  Allows an individual to start up a business with less risk involved
- C.
  
  You have to follow the rules and standards of the franchise, there is less flexibility for you to do what you want
- D.
  
  You benefit from the reputation of the franchise
Correct Answer
C. You have to follow the rules and standards of the franchise, there is less flexibility for you to do what you want

Explanation
Franchising offers numerous benefits, such as the ability to benefit from national advertising, start a business with reduced risk, and leverage the reputation of the franchise. However, one drawback of franchising is that franchisees must adhere to the rules and standards set by the franchise. This lack of flexibility restricts their ability to make independent decisions and operate the business according to their own preferences.

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3.

What is the maximum number of people that can be involved in a partnership?
- A.
  
  1-20
- B.
  
  1-40
- C.
  
  1-60
- D.
  
  1-80
Correct Answer
A. 1-20

Explanation
A partnership is a business structure where two or more individuals come together to carry out a business venture. The maximum number of people that can be involved in a partnership is typically limited to 20. This limitation ensures that the partnership remains manageable and allows for effective decision-making and coordination among the partners. Having too many partners can lead to complications and difficulties in running the business smoothly. Therefore, the correct answer is 1-20.

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4.

Which form of ownership is 'Matthew & Bragg Solitictors' likely to come under?
- A.
  
  Sole Trader
- B.
  
  Partnership
- C.
  
  Franchise
- D.
  
  Private Limited Company (Ltd)
Correct Answer
B. Partnership

Explanation
'Matthew & Bragg Solicitors' is likely to come under the form of ownership known as Partnership. A partnership is a business structure in which two or more individuals share ownership, responsibilities, and profits of the business. In this case, Matthew and Bragg are likely to be the partners of the solicitors' firm, indicating a partnership form of ownership.

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5.

Which of these is the correct definition for Unlimited Liability?
- A.
  
  The owners are not liable for the firms debt and will only lose the amount they initially invested
- B.
  
  The owners are personally liable for the firms debt and may have to pay them out of their own pocket
Correct Answer
B. The owners are personally liable for the firms debt and may have to pay them out of their own pocket

Explanation
Unlimited liability refers to a situation where the owners of a firm are personally responsible for the company's debts and may have to use their personal assets to pay off the debts. This means that if the firm cannot meet its financial obligations, the owners can be held personally liable and may have to bear the financial burden by using their own money. This is in contrast to limited liability, where the owners' liability is limited to the amount they have invested in the company.

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6.

Which of these forms of ownership has Unlimited Liability?
- A.
  
  Sole Trader
- B.
  
  Charities
- C.
  
  Private Limited Company (ltd)
- D.
  
  Public Limited Company
Correct Answer
A. Sole Trader

Explanation
A sole trader has unlimited liability, meaning that the owner is personally responsible for all debts and liabilities of the business. This means that if the business fails or incurs significant debts, the owner's personal assets can be used to settle those debts. In contrast, charities, private limited companies (ltd), and public limited companies have limited liability, where the owners' personal assets are protected and only the assets of the business are at risk.

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7.

Why is it benefical for a company to have Limited Liability?
- A.
  
  It means they can keep all their profits
- B.
  
  If the company goes bust they do not have to repay debts out of their own pocket
- C.
  
  Because if you have unlimited liability you have to pay the debts back yourself
- D.
  
  Because your staff will like you more
Correct Answer
B. If the company goes bust they do not have to repay debts out of their own pocket

Explanation
Limited liability is beneficial for a company because it ensures that the owners or shareholders are not personally responsible for the company's debts. If the company goes bankrupt or faces financial difficulties, the owners' personal assets are protected, and they are not required to repay the debts from their own pockets. This provides a sense of security and reduces the financial risk for the owners, encouraging investment and entrepreneurship.

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8.

Which of the following is a reason why sole traders are successful?
- A.
  
  They can offer a personalised, specialist service that meets the needs of their customers
- B.
  
  Because unlimited liability is a 'protection' against debt
- C.
  
  Because partnerships mean you can share the workload so you do what you're best at
- D.
  
  Because you benefit from the marketing done by the franchiser
Correct Answer
A. They can offer a personalised, specialist service that meets the needs of their customers

Explanation
Sole traders are successful because they have the ability to offer a personalised, specialist service that caters to the specific needs and preferences of their customers. As a sole trader, they have the freedom to tailor their products or services to meet individual customer requirements, providing a unique and customized experience. This level of personalization and specialization often leads to increased customer satisfaction and loyalty, ultimately contributing to the success of the sole trader.

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Current Version
Jul 26, 2024

Quiz Edited by
ProProfs Editorial Team
May 24, 2010

Quiz Created by
Hm00007

Quiz To Test Your Knowledge Of Business Ownership!

Which of these companies is a franchise?

Which of these is not a benefit of franchising?

What is the maximum number of people that can be involved in a partnership?

Which form of ownership is 'Matthew & Bragg Solitictors' likely to come under?

Which of these is the correct definition for Unlimited Liability?

Which of these forms of ownership has Unlimited Liability?

Why is it benefical for a company to have Limited Liability?

Which of the following is a reason why sole traders are successful?