ESB Practice Test #3 Solved 100%
Correct 2024
A welding shop owner rents space in a building and need $5000 in supplies to complete
a large project for a new customer. The bank has turned down a personal loan request.
The welding shop owner does not want to share ownership of the business by selling
equity shares to raise the funds needed for these supplies. What is the most practical
source of funding for the materials needed to complete this customer's job? - Answer-
Asking for an advance payment from the customer whose large order is the reason
materials are needed.
The owner of a gas station on one side of town wants to retire and offers to sell the
station to a competitor located on the other side of town. The competitor agrees to cash
out the seller, merge the two businesses, and continue operating both locations. This is
an example to which exit strategy? - Answer-Harvesting
A business is legally structured as a C Corporation. What are the tax implications for
this structure? - Answer-The corporations pays taxes and each of the shareholders
pays taxes.
A charter fishing boat has an ending cash balance of ($20,000) in May. For the month of
June, the company forecasts the following inflow and outflow of cash: Cash Sales
$500,000, Accounts Receivable collected $350,000, Asset sales $55,000, Direct
materials and labor $(200,000), Overhead $(320,000), Selling & Administrative costs
$(110,000), Asset purchases $(70,000), and Dividend payment $(100,000). What will be
the company's beginning cash flow in July? - Answer-$85,000
Which characteristic would be beneficial to an entrepreneur? - Answer-Doesn't give up
easily
What is one characteristic of an entrepreneur? - Answer-Responsible
How would a prospective entrepreneur benefit from a personality self-assessment? -
Answer-It can identify strengths and weaknesses in the entrepreneur's leadership style.
An automotive mechanic has noticed that a local major competitor has several vehicles
parked outside his garage waiting for service. The mechanic learns that many people
complain about the long wait. Which variable should be used by the automotive
mechanic to attract these customers? - Answer-Speed of service
An entrepreneur wants to own a bakery. She opens a bakery that specializes in
wedding cakes. After 6 months, the business fails and the bakery must close. Which
choice should the entrepreneur make based on this failure? - Answer-The entrepreneur
should evaluate why the business failed and identify the strengths and weaknesses of
Correct 2024
A welding shop owner rents space in a building and need $5000 in supplies to complete
a large project for a new customer. The bank has turned down a personal loan request.
The welding shop owner does not want to share ownership of the business by selling
equity shares to raise the funds needed for these supplies. What is the most practical
source of funding for the materials needed to complete this customer's job? - Answer-
Asking for an advance payment from the customer whose large order is the reason
materials are needed.
The owner of a gas station on one side of town wants to retire and offers to sell the
station to a competitor located on the other side of town. The competitor agrees to cash
out the seller, merge the two businesses, and continue operating both locations. This is
an example to which exit strategy? - Answer-Harvesting
A business is legally structured as a C Corporation. What are the tax implications for
this structure? - Answer-The corporations pays taxes and each of the shareholders
pays taxes.
A charter fishing boat has an ending cash balance of ($20,000) in May. For the month of
June, the company forecasts the following inflow and outflow of cash: Cash Sales
$500,000, Accounts Receivable collected $350,000, Asset sales $55,000, Direct
materials and labor $(200,000), Overhead $(320,000), Selling & Administrative costs
$(110,000), Asset purchases $(70,000), and Dividend payment $(100,000). What will be
the company's beginning cash flow in July? - Answer-$85,000
Which characteristic would be beneficial to an entrepreneur? - Answer-Doesn't give up
easily
What is one characteristic of an entrepreneur? - Answer-Responsible
How would a prospective entrepreneur benefit from a personality self-assessment? -
Answer-It can identify strengths and weaknesses in the entrepreneur's leadership style.
An automotive mechanic has noticed that a local major competitor has several vehicles
parked outside his garage waiting for service. The mechanic learns that many people
complain about the long wait. Which variable should be used by the automotive
mechanic to attract these customers? - Answer-Speed of service
An entrepreneur wants to own a bakery. She opens a bakery that specializes in
wedding cakes. After 6 months, the business fails and the bakery must close. Which
choice should the entrepreneur make based on this failure? - Answer-The entrepreneur
should evaluate why the business failed and identify the strengths and weaknesses of
