BA 101 MIDTERM TEST QUESTIONS AND ANSWERS LATEST
UPDATE
forms of business
sole proprietorship, partnership, corporation, limited liability company (LLC)
Sole Proprietorship
owned and operated by a single owner
sole proprietorship characteristics
easy, quick, simple; full control w/ minimal administration; adaptable; big risk &
personal exposure
partnership
when two(ish) people form a business
two types of partnerships
general partnership (mutual agency) and limited partnership (no mutual agency)
partnership characteristics
voluntary association; unlimited liability; mutual agency; limited life; limited access
to $; partners keep control; relatively unregulated; single taxation
corporation
a business owned by shareholders
types of corporations
domestic, foreign, alien
domestic corporation
a corporation in the state in which it is incorporated
foreign corporation
operates in states other than the state of incorporation
alien corporation
organized in one country & operates in another
corporation characterisitics
separate legal entity; limited liability; limited shareholder power; unlimited life; easy
access to capital; shareholders may loose control; government regulation; double
taxation
LLC
a company owned by shareholders with limited liability
LLC characteristics
pass through taxation; best for medium sized businesses; flexible; limited liability
B Corps (benefit corporations)
people, planet, profit; goal of sustainability
merger
two firms agree to join into one
acquisition
one firm buys another firm
horizontal acquisition
the acquisition of a company competing in the same industry as the acquiring firm
vertical acquisition
, the acquisition of a company in the distribution channel
conglomerate acquisition
A combination of two companies involved in unrelated lines of business
entrepreneur
one who creates a new business in the face of risk & uncertainty for the purpose of
achieving profit & growth by identifying opportunities & assembling the necessary
resources to capitalize on them
characteristics of an entrepreneur
taking intuitive; preference for moderate risk; confidence in succeeding; self- reliance;
perseverance; high-energy; competitiveness; organized
innovation
tool of entrepreneurs; ability to pivot & create something new & intriguing
systematic innovation
purposeful & organized search for changes & analysis of the opportunities that change
will bring
intrapreneuraship
someone (or a group of people) who is designated to be innovative & opportunistic
crowd sourcing
practice of obtaining needed services, ideas, or content by talking to customers
entrepreneurship process
1.idea 2.opportunity analysis 3.feasibility analysis 4.business plan 5. funding
capital requirements
estimate of startup capital required to launch
estimated earnings
forecasted income statements
return on investment
combines capital requirements and estimated earnings to determine how much return is
expected for investors
business plan
systematic evaluation of a venture's chances for success
steps of a business plan
1. executive summary 2. business details 3. marketings & sales strategy 4.credentials 5.
set up 6. financial plan & successes
functions of a business plan
guiding the company; attracting investors
reasons a business fails
a declining market; dysfunction managements; operational inefficiencies; poor
accounting; lack of a cash cushion; lack of a longterm plan
equity capital
personal investment of owners in the firm
types of financing
debt and equity financing
debt financing
loans; risk vs. return; liabilities
equity financing
UPDATE
forms of business
sole proprietorship, partnership, corporation, limited liability company (LLC)
Sole Proprietorship
owned and operated by a single owner
sole proprietorship characteristics
easy, quick, simple; full control w/ minimal administration; adaptable; big risk &
personal exposure
partnership
when two(ish) people form a business
two types of partnerships
general partnership (mutual agency) and limited partnership (no mutual agency)
partnership characteristics
voluntary association; unlimited liability; mutual agency; limited life; limited access
to $; partners keep control; relatively unregulated; single taxation
corporation
a business owned by shareholders
types of corporations
domestic, foreign, alien
domestic corporation
a corporation in the state in which it is incorporated
foreign corporation
operates in states other than the state of incorporation
alien corporation
organized in one country & operates in another
corporation characterisitics
separate legal entity; limited liability; limited shareholder power; unlimited life; easy
access to capital; shareholders may loose control; government regulation; double
taxation
LLC
a company owned by shareholders with limited liability
LLC characteristics
pass through taxation; best for medium sized businesses; flexible; limited liability
B Corps (benefit corporations)
people, planet, profit; goal of sustainability
merger
two firms agree to join into one
acquisition
one firm buys another firm
horizontal acquisition
the acquisition of a company competing in the same industry as the acquiring firm
vertical acquisition
, the acquisition of a company in the distribution channel
conglomerate acquisition
A combination of two companies involved in unrelated lines of business
entrepreneur
one who creates a new business in the face of risk & uncertainty for the purpose of
achieving profit & growth by identifying opportunities & assembling the necessary
resources to capitalize on them
characteristics of an entrepreneur
taking intuitive; preference for moderate risk; confidence in succeeding; self- reliance;
perseverance; high-energy; competitiveness; organized
innovation
tool of entrepreneurs; ability to pivot & create something new & intriguing
systematic innovation
purposeful & organized search for changes & analysis of the opportunities that change
will bring
intrapreneuraship
someone (or a group of people) who is designated to be innovative & opportunistic
crowd sourcing
practice of obtaining needed services, ideas, or content by talking to customers
entrepreneurship process
1.idea 2.opportunity analysis 3.feasibility analysis 4.business plan 5. funding
capital requirements
estimate of startup capital required to launch
estimated earnings
forecasted income statements
return on investment
combines capital requirements and estimated earnings to determine how much return is
expected for investors
business plan
systematic evaluation of a venture's chances for success
steps of a business plan
1. executive summary 2. business details 3. marketings & sales strategy 4.credentials 5.
set up 6. financial plan & successes
functions of a business plan
guiding the company; attracting investors
reasons a business fails
a declining market; dysfunction managements; operational inefficiencies; poor
accounting; lack of a cash cushion; lack of a longterm plan
equity capital
personal investment of owners in the firm
types of financing
debt and equity financing
debt financing
loans; risk vs. return; liabilities
equity financing
