chapter 7 vocab

Question 1

a business that is owned and managed by one person

Answer 1

sole proprietorship

Question 2

a law governing what types of structures and businesses are allowed in a particular area

Answer 2

zoning laws

Question 3

a person or business’s legally enforceable responsibility

Answer 3

liability

Question 4

property pledged by a borrower security for a loan

Answer 4

collateral

Question 5

duration of a firm’s life

Answer 5

longevity

Question 6

a business owned and controlled by two or more people who share in its profits and are responsible for its losses

Answer 6

partnership

Question 7

a partnership in which all members have equal authority and share equally in the businesses profits and losses

Answer 7

general partnership

Question 8

a form of partnership in which some members invest money but take no part in management

Answer 8

limited partnership

Question 9

a business in which a group of owners called stockholders share in the profits and losses

Answer 9

corporations

Question 10

an application to form a new corporation

Answer 10

articles of incorporation

Question 11

a document that a government issues to grant certain rights and impose certain restrictions on a bank or corporation

Answer 11

corporate charter

Question 12

a panel elected by the stockholders of a corporation to establish its policies and overall direction

Answer 12

board of directors

Question 13

a share of ownership in a corporation

Answer 13

stock

Question 14

the smallest unit of ownership in a corporation

Answer 14

shares

Question 15

a stockholder’s portion of a corporation’s profit

Answer 15

dividends

Question 16

a share of ownership in a corporation, grants dividends and a voice in corporate management to the shareholder

Answer 16

common stock

Question 17

a share of ownership in a corporation

Answer 17

preferred stock

Question 18

a document representing a loan made by an investor to a corporation

Answer 18

corporate bond

Question 19

the amount of money that is borrowed

Answer 19

principal

Question 20

the financial return gained by investing or lending capital

Answer 20

interest

Question 21

the joining of two or more businesses under a single ownership

Answer 21

merger

Question 22

a corporation made up of various businesses that produce the same or similar goods and services

Answer 22

horizontal combination

Question 23

a corporation made up of various businesses involved in different stages of the production process of the same good or service

Answer 23

vertical combination

Question 24

a corporation made up of several companies involved in different industries and markets

Answer 24

conglomerate combination

Question 25

a business that another company either owns or in which it has a controlling interest

Answer 25

subsidiaries

Question 26

a business that pays another established business to use the latter's name and product line

Answer 26

franchise

Question 27

a business that is owned collectively by those who use its goods and services

Answer 27

cooperatives

Question 28

an organization that generates revenue from product sales or donations but does not distribute the profits to any owner or trustee

Answer 28

nonprofit organization