ESB Cert Practice

Front

What is entrepreneurship?

Back

Setting up a business with the aim to make a profit.

Front

You need to create a legal structure for your small business. You would like some of the benefits enjoyed by larger corporations, but do not want to be taxed twice. You have four partners who will be shareholders. None of you plan to sell your ownership shares to the public, but do want to be protected from business liabilities. Which legal structure should you set up for your business?

Back

S-Corporation

Answer explanation

The four main types of business ownership or business structures: sole proprietorship, partnership, corporation, and Limited Liability Company (LLC)

Front

What is the correct order of the stages of the business life cycle? Options: Existence, Success, Takeoff, Maturity, Survival of the Fittest; Success, Existence, Takeoff, Maturity, Survival of the Fittest; Takeoff, Existence, Success, Survival of the Fittest, Maturity; Existence, Survival of the Fittest, Success, Takeoff, Maturity

Back

Existence, Survival of the Fittest, Success, Takeoff, Maturity

Front

Which viable business opportunity does the retiring rancher foresee?

Back

An increase in land value

Answer explanation

The opening of a ski resort next to the rancher's land will increase demand for housing and businesses to support the new resort. This will increase the demand for land in the surrounding area and should increase the value of the rancher's land.

Front

What is the role of a CFO?

Back

Creates budgets, analyzes financial data, and forecasts company profits.

Answer explanation

Front

Anya wants to set up a legal structure for her food delivery service. Which of the following is not a question she should she ask herself to help her make her decision? Is it important for me to make all of the decisions for the business? Will this business be too risky for me to start it alone? Do I have any personal assets that I want to make sure are protected?

Back

Do I even need to set up a legal structure?

Front

Match the types of business legal structures with each of their main benefits: 1 Sole proprietorship, 2 General partnership, 3 C corporation, 4 S corporation, 5 Nonprofit corporation, 6 Limited liability company; A Pays no U.S. federal taxes, B Easiest to set up, C Liability split with another person, D Provides single person with greater liability protection, E High level of protection and individual tax rate, F Easier to raise/borrow money

Back

1=B, 2=C, 3=F, 4=E, 5=A, 6=D

Front

Match the definitions that best describe each of the following components of financing a business: 1 Emergency fund, 2 Reserve for fixed expenses, 3 Startup expenditures, 4 Startup investment; A One‐time purchases you need to get the business running, B One‐time sum requested from investors to start the business, C Money to cover the fixed expenses for at least three months, D Money reserved to cover emergencies in the first three months

Back

1=D, 2=C, 3=A, 4=B

Front

Which U.S. government federal agency is responsible for reducing the harmful impact that businesses might have on the environment?

Back

Environmental Protection Agency (EPA)

Front

What is Darby most likely missing regarding parking his taco truck in the busy part of the city?

Back

A Permit