ESB Practice Test – Version 1

Which of the following best defines entrepreneurship?

• Managing an established business

• Starting and operating a business to pursue opportunities

• Working as an employee in a corporation

• Expanding a government organization

A sole proprietorship has which disadvantage?

• Limited liability protection

• Profits are shared

• Owner has unlimited personal liability

• Requires a board of directors

A limited liability company (LLC) provides:

• Complete immunity from taxes

• Liability protection with flexible tax treatment

• No reporting requirements

• Unlimited liability for members

Which of the following is a stage in the business life cycle?

• Invention, Decline, Retirement

• Startup, Growth, Maturity, Decline

• Entry, Employment, Expansion

• Recruitment, Planning, Exit

A commission-based compensation structure is most likely used for:

• Customer service representatives

• Salespeople

• Manufacturing workers

• Administrative staff

Which is NOT part of the design thinking process?

• Empathize
  

• Define
  

• 
  Prototype
  

• Budgeting

Which characteristic is most associated with an entrepreneurial mindset?

• Preference for stability

• Risk tolerance and innovation

• Avoiding decision-making

• Dependence on supervision

A strong business opportunity is defined by:

• High cost and low demand

• Market need and potential for profit

• No competition and no customers

• Government funding guarantee

Which of the following is a key purpose of a business plan?

• To replace employee training manuals

• To outline goals, strategies, and financial projections

• To register for tax IDs

• To avoid legal disputes

A trademark protects:

• An invention

• A company logo or brand name

• A creative book or song

• Confidential formulas