ESB Practice Exam 1

What is the key objective of small business owners?

• To innovate new products

• To generate profits

• To expand globally

• To hire more employees

What is required for a franchise arrangement?

• A new product idea

• A previously agreed-upon amount in sales revenue

• A large number of employees

• A physical store location

E-commerce can be _______ products or digital products.

• physical

• virtual

• imaginary

• non-existent

Services are intangible things like a skill or expertise that is performed. True or False?

• True

• False

What are digital goods & services considered as?

• Tangible products

• Intangible services

• Physical storage

• Inventory items

In a Business-to-Consumer (B2C) transaction, who purchases an item?

• A business from another business

• A customer from a business

• A business from a customer

• A customer from another customer

In a Business-to-Business (B2B) transaction, a business purchases a product, service, or information from another _________.

• business

• consumer

• individual

• retailer

What is one disadvantage of an S Corporation?

• Unlimited shareholders

• No voting rights for stockholders

• Strict qualification requirements

• High taxation

How are the profits of a C Corporation taxed?

• Directly to the owners

• Separate from its owners

• Not taxed at all

• Only taxed when distributed

What is one advantage of a Limited Liability Company (LLC)?

• Unlimited personal liability

• Pass-through taxation

• High cost to create