Multiple choice questions on business ownership, valuation, and success factors.

Here are the answers to the multiple-choice questions:

Q1. A sole trader is legally responsible for all the debts of the business. If the business cannot repay its debts, then the sole trader must sell personal assets to make up the short fall. This is called unlimited liability.

• D. unlimited

Q2. If the selling price for a business is greater than the value of its net assets, the difference would be goodwill.

• C. goodwill

Q3. An advantage of buying an existing business is that there is no additional advertising costs for your business, as it likely already has an established customer base and brand recognition.

• B. there is no additional advertising costs for your business.

Q4. An equitable price is a fair and reasonable price, which is a sign of good business practice, not poor management.

• A. equitable price

Q5. Small businesses fail due to sales and inventory problems, lack of initial planning, and owners not running their own business. Executing proper record-keeping is a positive practice that helps prevent failure.

• C. executing of proper record

Q6. The characteristics of a successful business person from the list are: 1. Risk-taking, 4. Honesty, and 7. Take long term view.

• C. 1, 4 and 7