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đź“‘ Refined Flashcards (Ch. 4, 5, 6)
Chapter 4 – Business Ownership & Organization
Q: What is a franchisor?
A: The headquarters/supplier who owns the brand and sells the method of operation to franchisees.
Q: What is a franchisee?
A: The person or business that buys the rights to operate a franchise.
Q: Difference between franchisor and franchisee?
A: Franchisor = seller/headquarters. Franchisee = buyer/operator.
Q: What is double taxation?
A: Corporate earnings and shareholder dividends are both taxed.
Q: Which business structure avoids double taxation but keeps limited liability?
A: S corporation.
Q: Which business type has the least government regulation?
A: Sole proprietorship.
Q: Disadvantage of sole proprietorship?
A: Difficulty raising capital and unlimited liability.
Q: Difference between general and limited partnership?
A: General = all partners manage and have unlimited liability. Limited = some partners only invest, liability limited to their contribution.
Q: Example: Tom invests $40,000 but doesn’t manage. His liability is capped at $40,000. What type of partnership?
A: Limited partnership.
Q: What is unlimited liability?
A: Owners are personally responsible for debts and damages.
Q: What is limited liability?
A: Owners’ responsibility is limited to their investment in the business.
Q: What is a cooperative?
A: Organization owned collectively to gain economic power (ex: farmers, small businesses).
Q: What is a merger?
A: Two companies combine to form one new company.
Q: What is an acquisition?
A: One company purchases another.
Q: Difference between merger and acquisition?
A: Merger = join into new entity. Acquisition = one buys another.
Q: McKesson + HBOC (wholesaler + software) is an example of what?
A: Vertical merger.
Q: What is a joint venture?
A: Temporary business arrangement for one project, dissolved after completion.
Chapter 5 – Entrepreneurship & Financing
Q: What is an entrepreneur?
A: A person who takes the risk of starting and managing a business.
Q: What is an intrapreneur?
A: Someone innovating within a corporation, not starting their own business.
Q: What is a micropreneur?
A: Entrepreneur who wants to stay small.
Q: What is a multipreneur?
A: Entrepreneur who starts multiple businesses.
Q: Difference: entrepreneur vs intrapreneur?
A: Entrepreneur = independent. Intrapreneur = innovates inside an existing company.
Q: What is a business plan?
A: A formal written statement describing a business idea, market, competition, and finances.
Q: Example: Emily wants to open a B&B and get a bank loan. What does she need?
A: A business plan.
Q: What is debt financing?
A: Borrowed money that must be repaid with interest.
Q: What is equity financing?
A: Selling ownership (stock) to raise money.
Q: Difference between debt and equity financing?
A: Debt = borrowed, repay with interest. Equity = ownership sold, no repayment.
Q: What is venture capital?
A: Financing from firms investing in high-growth startups, take ownership & management role.
Q: What are angel investors?
A: Wealthy individuals funding startups in exchange for equity.
Q: Difference between angel investors and venture capital?
A: Angel = wealthy individuals. Venture = firms, formal investment.
Q: What is outsourcing?
A: Hiring another company to handle specific tasks (ex: mailing services).
Q: What is the SBA (Small Business Administration)?
A: Federal agency that provides loans and support to small businesses.
Chapter 6 – Management & Leadership
Q: What are the 4 functions of management?
A: Planning, Organizing, Leading, Controlling.
Q: Example: Creating goals and designing strategies is what function?
A: Planning.
Q: Example: Assigning roles and resources is what function?
A: Organizing.
Q: Example: Motivating employees is what function?
A: Leading.
Q: Example: Measuring performance against standards is what function?
A: Controlling.
Q: Levels of management?
A: Top (sets goals), Middle (implements plans), Supervisory (daily operations).
Q: Example: Plant manager overseeing shift managers is what level?
A: Middle management.
Q: Example: Supervisor running daily production line is what level?
A: Supervisory management.
Q: What is strategic planning?
A: Long-range, big-picture planning.
Q: What is operational planning?
A: Short-term, daily/weekly planning by supervisors.
Q: What is a contingency plan?
A: Backup plan for unexpected events.
Q: What are technical skills?
A: Specialized knowledge (ex: programming, accounting).
Q: What are conceptual skills?
A: Ability to see the big picture and plan.
Q: What is empowerment?
A: Giving employees more autonomy and decision-making power.
Q: What is a mission statement?
A: The general purpose or reason for an organization’s existence.
Q: What are participative leadership styles?
A: Consensual, democratic, consultative.
Q: What is leadership style?
A: The consistent pattern of behavior used by a leader.
đź“ť How to Use in Knowt
Copy/paste these directly.
You’ll now have straight definitions, differentiation cards, and situational examples.
When practicing, shuffle them so you don’t memorize the order.
Mark/star the ones you miss — drill those before bed + tomorrow morning.
⚠Strict advice: If you drill these cards 2–3 times before the exam, focusing on the differentiation ones (partnerships, financing, management functions), you’ll be ready for any twist in wording your professor throws at you.
Do you want me to also make you a 20-question mock exam (mixed from all 3 chapters, no answers shown) so you can simulate test conditions tonight?Got it ✅ — I’ll keep the flashcards sharp, but phrase them a little trickier, closer to how professors like to word exam questions (not straight memorization, but not so twisted you get lost).
Here’s the refined set with harder phrasing:
📑 Exam-Style Flashcards (Ch. 4–6, Harder Wording)
Chapter 4 – Business Ownership & Organization
Q: The company that grants the rights to use its name and business model in exchange for fees is called the ______.
A: Franchisor
Q: An individual who purchases the right to operate a business under another company’s name is called the ______.
A: Franchisee
Q: Which ownership structure is most vulnerable to personal financial loss if the business fails?
A: Sole proprietorship (unlimited liability)
Q: Which form of ownership offers the greatest freedom from government regulation, but the least ability to raise capital?
A: Sole proprietorship
Q: If partners both manage a company and are equally responsible for all debts, what kind of partnership is this?
A: General partnership
Q: A partner invests $50,000 but does not participate in daily management. Their liability is limited to that $50,000. What kind of partner is this?
A: Limited partner (in a limited partnership)
Q: A firm that combines with its supplier in order to control more of the supply chain has completed what type of merger?
A: Vertical merger
Q: Two pharmaceutical companies combine to form one new entity. This is best described as a ______.
A: Merger
Q: One corporation fully purchases another, but both retain separate operations until integration. This is an example of an ______.
A: Acquisition
Q: When two companies temporarily work together to accomplish a single, limited project, the arrangement is called a ______.
A: Joint venture
Q: What kind of organization is collectively owned by members to increase buying power and reduce costs?
A: Cooperative
Q: Which type of corporation provides limited liability to its owners while avoiding double taxation?
A: S corporation
Chapter 5 – Entrepreneurship & Financing
Q: A person who assumes financial risk to create and operate a business is called a(n) ______.
A: Entrepreneur
Q: An employee who applies entrepreneurial thinking inside a large organization is a(n) ______.
A: Intrapreneur
Q: Which type of entrepreneur deliberately keeps their business small rather than pursuing growth?
A: Micropreneur
Q: Which type of entrepreneur launches several ventures, sometimes simultaneously?
A: Multipreneur
Q: Which formal document outlines a new company’s goals, competitive analysis, financial forecasts, and strategy for success?
A: Business plan
Q: A prospective business owner seeking a bank loan is most likely required to submit a ______.
A: Business plan
Q: Borrowed money that must be repaid with interest is called ______ financing.
A: Debt financing
Q: Raising money by selling ownership shares in the company is called ______ financing.
A: Equity financing
Q: Investors who demand partial ownership and management influence in exchange for funding high-growth startups are called ______.
A: Venture capitalists
Q: Wealthy individuals who personally invest in early-stage businesses in exchange for equity are known as ______.
A: Angel investors
Q: Hiring an outside company to perform services that could otherwise be done in-house is called ______.
A: Outsourcing
Q: Which U.S. government agency provides financial assistance and consulting services to small businesses?
A: Small Business Administration (SBA)
Chapter 6 – Management & Leadership
Q: The process of determining goals and deciding how to achieve them is known as ______.
A: Planning
Q: The management function that establishes a company’s structure, assigns tasks, and allocates resources is called ______.
A: Organizing
Q: Guiding and motivating employees to achieve objectives is known as ______.
A: Leading
Q: The function that involves setting performance standards, measuring results, and correcting deviations is called ______.
A: Controlling
Q: Which level of management translates broad strategies into specific plans for divisions or plants?
A: Middle management
Q: Supervisors who oversee employees directly engaged in production are part of which management level?
A: Supervisory (first-line) management
Q: Developing long-term goals for the organization as a whole is known as ______ planning.
A: Strategic planning
Q: Short-term planning that covers current operations is known as ______ planning.
A: Operational planning
Q: A backup strategy created in case original plans fail or unforeseen events occur is a ______.
A: Contingency plan
Q: What type of managerial skill involves specialized expertise such as accounting or computer programming?
A: Technical skill
Q: The ability to see the “big picture” and understand how different parts of the business fit together is a ______ skill.
A: Conceptual skill
Q: Granting employees greater decision-making authority and control over resources is called ______.
A: Empowerment
Q: An organization’s formal statement of purpose and reason for existence is called its ______.
A: Mission
Q: Leaders who make decisions after consulting subordinates and value input are demonstrating which leadership style?
A: Participative (democratic/consultative/consensual)
Q: The consistent way a leader approaches motivating and directing employees is known as their ______.
A: Leadership style
✅ These are now phrased closer to exam wording — a little less obvious, a little more situational.
⚡ Strict advice:
Drill these tonight in Knowt or on paper.
When you answer, don’t just recall the word — explain to yourself why that answer fits and why the others don’t.
This will prep you for wording tricks on the exam.
Do you want me to now turn this into a 20-question “mock exam” with multiple choice and no answers shown, so you can simulate the real test under time pressure?