BSM 1501 ASSIGNMENT 2

MULTIPLE-CHOICE QUESTIONS Chapter 1 1. Ellen could be regarded as a/an _______ because she came up with the idea of opening a coffee shop. 1) entrepreneur 2) intrapreneur 3) small business manager 4) franchisor Answer: Page 2 of the prescribed textbook: Entrepreneurs have the ability to identify and seize an opportunity and create and develop a business by adding value to the business. They do this by applying resources that include finance, time, effort, people and skills. They are willing to take risks; and through their businesses they organise, manage and achieve results. 2. When Celest started the enterprise, she employed three employees. At that stage, CeleBAKEtion could be classified as a _______ business. 1) very small 2) small 3) medium 4) large Answer: Page 5 of the prescribed textbook: 1.3.1 The formal small business The small and micro business sector In the National Small Enterprise Act 102 of 1996 as amended by the National Small Business Amendment Act 26 of 2003, a micro business is defined as a business with five or fewer employees with a turnover of up to R100 000 per annum. A very small business employs between one and ten employees, and a small business between 11 and 50 employees. 3. Celest registered her enterprise as a sole proprietorship, which indicates that she operated as a formal enterprise. A disadvantage of a formal enterprise is that Celest _______. 1) does not have to keep financial records 2) has to pay tax 3) has easier access to finance 4) does not need to have a recognised business premises Answer: Page 8 of the study guide: 1.4.3 Advantages and disadvantages of formal and informal businesses 4. Celest included other confe