Assignment:
True/False
Indicate whether the sentence or statement is true or false
1. Small businesses that practice skimming of income are acting unethically and illegally.
2. Unlike employees in small firms, those who work for large corporations face pressure from various sources to act in ways tint conflict with their own sense of what is right and wrong.
3. Because they are in contact with a much larger body of employees, the ethical influence of a leader in a large business is more pronounced than is that of a leader in a small firm.
4. Acting in a socially responsible manner can be costly to small businesses because acting in the public interest always requires spending money, which reduces profits.
5. Only large corporations can afford to be socially responsible.
6. The failure rate for independent small businesses is comparable to that for franchised businesses.
7. Franchising is typically defined as a marketing system revolving around a two-party legal agreement whereby a franchisor is granted the privilege to conduct business as an individual owner according to the methods and terms specified by the franchisee.
8. One of the draw backs of becoming a franchisor is the reduction in control.
9. The buyer of an existing business typically acquires its personnel, inventories, physical facilities, established banking connections, and ongoing relationships with trade suppliers.
10. A firm's financial statements should not be adjusted because they conform with generally accepted accounting principles.
11. In a family business, there is a possibility for either conflict or harmony between business goals and family goals.
12. Though the distinctive values that motivate and guide an entrepreneur in the founding of a firm are important, these cannot serve as a foundation for competitive advantage in the firm.
13. Any weakness in the management of a new business will mean its certain failure, since no one outside the business will be able to provide management assistance.
14. There are no limits on the owner's personal liability in a sole proprietorship.
15. The form of ownership of a business has no effect on income taxes.
16. The limited liability company differs from the C corporation in that the former avoids financial complications from double taxation.
17. Some entrepreneurs have found an active board of directors to be both practical and beneficial.
18. Most startup investors limit their investing to firms that offer potentially high returns within a one-to-three-year period.
19. Borrowing money rather than issuing common stock increases the potential for higher rates of return to owners.