DECA Entrepreneurship Sample Exam
2025-2026 LATEST UPDATE Questions n
answers
1. Which of the following is a type of intangible business property that is protected by law: - correct
answer ✔✔Trademark. A trademark is a symbol, design, or word used by a business to identify a good or
service and is registered with the government to prevent its use by others. A trademark is an example of
intangible business property. Federal law protects a business's intangible property from being used by
competitors. A business's inventory, acreage, and equipment are types of tangible property.
2. Basic torts relating to businesses often involve disputes concerning - correct answer ✔✔Contracts.
Business torts are wrongful actions against a business that cause it harm in some way. Disputes
concerning contracts are often the basis for businesses suing individuals or other businesses. Many
businesses have contractual arrangements with employees or vendors. If these contracts are broken, the
business might be harmed and seek compensation through the legal system. Basic torts relating to
businesses do not involve disputes concerning assaults, defamation, or emotional stress.
3. Which of the following is a characteristic of a business-format franchise: - correct answer
✔✔Continuous assistance is provided by the franchisor. A business-format franchise is a more complex
and more popular type of franchise arrangement than the product trade-name franchise. It involves a
close, continuous working relationship between the franchisor and the franchisee. Examples of the
business-format franchise are McDonald's, Holiday Inn, and Jiffy Lube. Products and other materials
usually must be purchased from the franchisor's list of approved vendors. The franchisee must operate
under the trade name of the franchisor.
4. Limited liability, indefinite length of life, ease of expansion, legal entity, and transfer of ownership are
considered advantages of a - correct answer ✔✔Corporation. Corporations are advantageous due to the
separate legal body that is created by a state charter. The charter limits individual liability, allows for
permanency of existence, ease in transferring ownership, and a greater number of resources for financial
growth. Both the sole proprietorship and partnership have unlimited liability, definitive life spans,
difficulty in raising capital, and are not separate legal entities. A trade union is a group that represents
people in similar occupational skill areas.
5. Channels of distribution benefit consumers by - correct answer ✔✔Making a variety of products
available to them. Channels of distribution benefit consumers by making a variety of products available
,to them. Without these channels, consumers could only buy products directly from producers, which
would be impractical. Channels may lower some but not all consumer product prices. They may raise the
quality of some but not all consumer products. Increased profits for businesses is not a benefit for
consumers.
6. For which of the following markets would producers use a short channel of distribution: - correct
answer ✔✔Local consumers. A short channel can be used when the potential customers are few and/or
located close together. The baby boomer, senior citizen, and Generation X markets have many potential
customers who are widely dispersed.
7. If a business considers where the consumers are and who they are before selecting a channel of
distribution, the business is considering the __________ factor. - correct answer ✔✔Market. Market
factors deal with where the consumers are, who they are, the information they require, and the size of
their orders. Understanding the market is an important aspect of selecting the best channel of
distribution. For example, it is important for businesses to know that most consumers prefer to buy
products from retailers. Promotion, human, and sales are not factors that businesses consider when
selecting a channel of distribution.
8. What do business employees often need to do before they are able to write proposals? - correct
answer ✔✔Research the problem. Proposals are intended to answer questions or provide
recommendations to solve problems. Business employees often need to research a particular situation
or problem before they are able to write proposals. After employees do research and gather information,
they write proposals that explain the problem and the solutions. The proposal is intended to persuade
the business to follow the recommendations. Employees usually do not need to analyze personal biases,
contact the customer, or evaluate technical skills before they are able to write proposals.
9. Which of the following is an example of a manager developing a policy that impacts customer
relations: - correct answer ✔✔Extending business hours on weekends. Management is responsible for
developing policies, and many of these policies have an impact on customer relations. An example of a
policy that usually improves customer relations is providing extended business hours on weekends.
Many customers work during the week and only have free time in the evenings and on weekends.
Businesses that offer extended hours on weekends are making it easy for customers to buy when it is
convenient for them. Scheduling employees' work hours, using security devices, and revising
bookkeeping procedures are routine business activities that managers perform on a regular basis.
10. What should a successful brand promise be able to do? - correct answer ✔✔Communicate an
appealing benefit. A brand promise is a business's agreement (spoken or unspoken) with customers that
it will consistently meet their expectations and deliver on its brand characteristics and values. Before the
business can deliver on its brand promise, it must have a product that offers an appealing benefit—one
, that persuades the target market to buy. For example, FedEx provides delivery services. The company's
brand promise focuses on reliability. Therefore, FedEx promises to get its customers' packages to their
destinations in a reliable manner—safely, quickly, and courteously—every time, which is an appealing
benefit for most customers. A procedure is the step-by-step process that a person follows when
performing a specific task. Customization involves making the product unique for each customer.
Customization, a high-quality image, and the process by which the business delivers its products may be
elements of a company's brand promise.
11. Which of the following is one way that freedom in a private enterprise system is limited by laws: -
correct answer ✔✔Certain occupations must be licensed. Even though there are many economic
freedoms in a private enterprise system, there are certain limits. Economic freedom is limited by laws
that have been created to protect everyone. Workers in certain occupations must be licensed to
safeguard public health and safety. Pay scales are not regulated but vary greatly depending on the
occupation, area of the country, and current economic conditions. The law does not require all workers
to take tests, although some businesses require applicants to take and pass ability tests before they are
hired. Employees are not required to register with the state.
12. During the month of July, sales at Handy's Shoe Mart totaled $2,500. The cost of the shoes was
$1,025. The owner paid $866 for supplies, insurance, rent, and utilities during the month. The $609 left
over represents the owner's - correct answer ✔✔Net profit. Net profit is the amount of money left over
after operating expenses are subtracted from gross profit. Sales income is the total received from the
sale of goods or services. Gross profit is the money left over after cost of merchandise is subtracted from
sales income. Operating expenses are the daily costs of running a business.
13. Non-corporations are taxed as pass-through entities, meaning that - correct answer ✔✔Profits and
losses are claimed on owners' personal tax returns. Non-corporations are taxed as passthrough entities,
meaning that profits and losses are claimed on owners' personal tax returns. Noncorporations are still
subject to federal taxes as well as state and local taxes. Business income-tax rates are based on how
much profit a business makes, not whether it is a corporation or not. Non-corporations pay payroll taxes
on employees, just as corporations do.
14. Which of the following activities is an example of preparing before attempting to sell an idea: -
correct answer ✔✔Determining the details of your idea. Before you can "sell" your idea to others, you
need to solidify the details and specifications of your proposal so that you can fully explain your idea to
your audience. Explaining solutions to audience needs, overcoming objections, and affirming the
audience's decision to "buy into" your idea are all steps in the selling process that come after doing
advance preparation.
2025-2026 LATEST UPDATE Questions n
answers
1. Which of the following is a type of intangible business property that is protected by law: - correct
answer ✔✔Trademark. A trademark is a symbol, design, or word used by a business to identify a good or
service and is registered with the government to prevent its use by others. A trademark is an example of
intangible business property. Federal law protects a business's intangible property from being used by
competitors. A business's inventory, acreage, and equipment are types of tangible property.
2. Basic torts relating to businesses often involve disputes concerning - correct answer ✔✔Contracts.
Business torts are wrongful actions against a business that cause it harm in some way. Disputes
concerning contracts are often the basis for businesses suing individuals or other businesses. Many
businesses have contractual arrangements with employees or vendors. If these contracts are broken, the
business might be harmed and seek compensation through the legal system. Basic torts relating to
businesses do not involve disputes concerning assaults, defamation, or emotional stress.
3. Which of the following is a characteristic of a business-format franchise: - correct answer
✔✔Continuous assistance is provided by the franchisor. A business-format franchise is a more complex
and more popular type of franchise arrangement than the product trade-name franchise. It involves a
close, continuous working relationship between the franchisor and the franchisee. Examples of the
business-format franchise are McDonald's, Holiday Inn, and Jiffy Lube. Products and other materials
usually must be purchased from the franchisor's list of approved vendors. The franchisee must operate
under the trade name of the franchisor.
4. Limited liability, indefinite length of life, ease of expansion, legal entity, and transfer of ownership are
considered advantages of a - correct answer ✔✔Corporation. Corporations are advantageous due to the
separate legal body that is created by a state charter. The charter limits individual liability, allows for
permanency of existence, ease in transferring ownership, and a greater number of resources for financial
growth. Both the sole proprietorship and partnership have unlimited liability, definitive life spans,
difficulty in raising capital, and are not separate legal entities. A trade union is a group that represents
people in similar occupational skill areas.
5. Channels of distribution benefit consumers by - correct answer ✔✔Making a variety of products
available to them. Channels of distribution benefit consumers by making a variety of products available
,to them. Without these channels, consumers could only buy products directly from producers, which
would be impractical. Channels may lower some but not all consumer product prices. They may raise the
quality of some but not all consumer products. Increased profits for businesses is not a benefit for
consumers.
6. For which of the following markets would producers use a short channel of distribution: - correct
answer ✔✔Local consumers. A short channel can be used when the potential customers are few and/or
located close together. The baby boomer, senior citizen, and Generation X markets have many potential
customers who are widely dispersed.
7. If a business considers where the consumers are and who they are before selecting a channel of
distribution, the business is considering the __________ factor. - correct answer ✔✔Market. Market
factors deal with where the consumers are, who they are, the information they require, and the size of
their orders. Understanding the market is an important aspect of selecting the best channel of
distribution. For example, it is important for businesses to know that most consumers prefer to buy
products from retailers. Promotion, human, and sales are not factors that businesses consider when
selecting a channel of distribution.
8. What do business employees often need to do before they are able to write proposals? - correct
answer ✔✔Research the problem. Proposals are intended to answer questions or provide
recommendations to solve problems. Business employees often need to research a particular situation
or problem before they are able to write proposals. After employees do research and gather information,
they write proposals that explain the problem and the solutions. The proposal is intended to persuade
the business to follow the recommendations. Employees usually do not need to analyze personal biases,
contact the customer, or evaluate technical skills before they are able to write proposals.
9. Which of the following is an example of a manager developing a policy that impacts customer
relations: - correct answer ✔✔Extending business hours on weekends. Management is responsible for
developing policies, and many of these policies have an impact on customer relations. An example of a
policy that usually improves customer relations is providing extended business hours on weekends.
Many customers work during the week and only have free time in the evenings and on weekends.
Businesses that offer extended hours on weekends are making it easy for customers to buy when it is
convenient for them. Scheduling employees' work hours, using security devices, and revising
bookkeeping procedures are routine business activities that managers perform on a regular basis.
10. What should a successful brand promise be able to do? - correct answer ✔✔Communicate an
appealing benefit. A brand promise is a business's agreement (spoken or unspoken) with customers that
it will consistently meet their expectations and deliver on its brand characteristics and values. Before the
business can deliver on its brand promise, it must have a product that offers an appealing benefit—one
, that persuades the target market to buy. For example, FedEx provides delivery services. The company's
brand promise focuses on reliability. Therefore, FedEx promises to get its customers' packages to their
destinations in a reliable manner—safely, quickly, and courteously—every time, which is an appealing
benefit for most customers. A procedure is the step-by-step process that a person follows when
performing a specific task. Customization involves making the product unique for each customer.
Customization, a high-quality image, and the process by which the business delivers its products may be
elements of a company's brand promise.
11. Which of the following is one way that freedom in a private enterprise system is limited by laws: -
correct answer ✔✔Certain occupations must be licensed. Even though there are many economic
freedoms in a private enterprise system, there are certain limits. Economic freedom is limited by laws
that have been created to protect everyone. Workers in certain occupations must be licensed to
safeguard public health and safety. Pay scales are not regulated but vary greatly depending on the
occupation, area of the country, and current economic conditions. The law does not require all workers
to take tests, although some businesses require applicants to take and pass ability tests before they are
hired. Employees are not required to register with the state.
12. During the month of July, sales at Handy's Shoe Mart totaled $2,500. The cost of the shoes was
$1,025. The owner paid $866 for supplies, insurance, rent, and utilities during the month. The $609 left
over represents the owner's - correct answer ✔✔Net profit. Net profit is the amount of money left over
after operating expenses are subtracted from gross profit. Sales income is the total received from the
sale of goods or services. Gross profit is the money left over after cost of merchandise is subtracted from
sales income. Operating expenses are the daily costs of running a business.
13. Non-corporations are taxed as pass-through entities, meaning that - correct answer ✔✔Profits and
losses are claimed on owners' personal tax returns. Non-corporations are taxed as passthrough entities,
meaning that profits and losses are claimed on owners' personal tax returns. Noncorporations are still
subject to federal taxes as well as state and local taxes. Business income-tax rates are based on how
much profit a business makes, not whether it is a corporation or not. Non-corporations pay payroll taxes
on employees, just as corporations do.
14. Which of the following activities is an example of preparing before attempting to sell an idea: -
correct answer ✔✔Determining the details of your idea. Before you can "sell" your idea to others, you
need to solidify the details and specifications of your proposal so that you can fully explain your idea to
your audience. Explaining solutions to audience needs, overcoming objections, and affirming the
audience's decision to "buy into" your idea are all steps in the selling process that come after doing
advance preparation.
