CHAPTER 5 TEST REVIEW Answers

1.

a)

What is an Excel file called?

An Excel file is called a workbook.

b)

How many worksheets does a new workbook contain?

A new workbook contains three worksheets.

2.
What are the differences between the three main forms of business ownership?
(Proprietorship, Partnership, Corporation)
Business forms differ in the ways in which decision-making and investments are made and to
whom liabilities are distributed. A sole proprietorship is owned by one person. One person is
responsible for all decisions and financial liability and that person solely benefits from all
profits. A partnership is owned by two or more partners who share investments, decisions,
liability, and profits. A corporation is owned by shareholders and managed by a board of
directors. Not all owners share decisions. Their liability is limited to the amount they invest.
They only share profits as the board approves.
3.
True or False. All investors in a general partnership have full liability for the debts of the
business.
True
4.

The people who make the major policy and financial decisions in a corporation are the
a. Investors
b. board of directors
c. managers
d. owners
b. board of directors

5.
When worksheet data is needed in a Word document, would it be best to retype the data into
the document or copy and paste the data from the worksheet? Why?
Rather than retype the data, which could introduce typing errors, the data should be
copied and pasted directly into the document from the worksheet.

6.

Which form of business ownership is the most complex and difficult to form?

The corporation is more complex to begin than other business forms. Forming a
corporation requires much more bureaucracy, is more subject to government
regulations, requires the organization of a board, and must have clearly defined bylaws.
7.

What are the other specialized forms of business ownership?

Specialized forms of business ownership include limited liability partnership, joint
venture, S corporation, limited liability companies, and nonprofit corporations.
Cooperatives and franchises could also be discussed here.

8.

9.

What are the three steps in the worksheet planning process?

1.

Determine what information the worksheet is to produce.

2.

Determine the data to include.

3.

Determine which data should be in rows and what data should be in columns.

What is usually the best method for entering cell references in a formula? Why?
Pointing is the best method for entering cell references into a formula because typing errors are
avoided.

10.

Why do people go into business for themselves?

Opportunity Presents Itself
Flexibility in Work Schedule
Think they can offer a better product
To make a profit
Enjoy it
Family business-know the business, grew up with it
Dont Have A Job

11. What are some advantages of a sole proprietorship?

Easy to start and end-few legal requirements must be met
Owner receives all profits
Control over decisions
12. Disadvantages of sole proprietorship?
Owner responsible for all debt
No help (Jack of all trades)
Personal assets at risk
Limited life
13. Advantages of a Partnership?

 Two people that can divide duties

Another decision maker
Losses are shared between partners
Easy to start
14. Disadvantages of a Partnership?
Disagreements between partners
Share profits
Personal assets at risk
Limited Life
15. Advantages of a Corporation?

Board of directors to help with decisions

Protect liability of stockholders to only the amount of money they invested; assets
protected
Unlimited Life
16. Disadvantages of a Corporation?

Most difficult form of business to organize

Many legal requirements