Entrepreneurship and small business
Exam 2026 Questions and Answers
Non-profit - Correct answer-No ownership, no US federal
C corporation - Correct answer-Foreign owners, unlimited shareholders, multiple
classes of stock. Best for international businesses even with being double taxed.
Sole Proprietorship - Correct answer-One owner, unlimited liability. Easy to create
but comes with unlimited liability.
S corporation - Correct answer-Special tax advantage, protects personal assets, no
more than 100 shareholders. Lower tax rate that prevents the company from being
double taxed.
LLC - Correct answer-Personal tax rate, not liable for company's debt. Ideal for
single owner seeking low risk.
Partnership - Correct answer-Two or more people. Shared financial banking.
Founder - Correct answer-Creates the company
CFO (Chief Financial Officer) - Correct answer-Oversees company's finances
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, Stockholder - Correct answer-Owns stock in the company
CEO (Chief Executive Officer) - Correct answer-Reports to the board of directors
COO (Chief Operating Officer) - Correct answer-Oversees daily operational and
administrative functions
Stakeholder - Correct answer-Has vested interest in the success of the company.
Equity - Correct answer-Non-Cash compensation
Hourly - Correct answer-Set rate of pay hours worked
Commission - Correct answer-Usually found in sales
salary - Correct answer-Set amount of pay in a given period
Correct order of the business life cycle - Correct answer-Existence
Survival
Success
Take-off
Resource maturity(owner separates from company)
Pivot or persist(continue to grow or new project)
Exit plan
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Exam 2026 Questions and Answers
Non-profit - Correct answer-No ownership, no US federal
C corporation - Correct answer-Foreign owners, unlimited shareholders, multiple
classes of stock. Best for international businesses even with being double taxed.
Sole Proprietorship - Correct answer-One owner, unlimited liability. Easy to create
but comes with unlimited liability.
S corporation - Correct answer-Special tax advantage, protects personal assets, no
more than 100 shareholders. Lower tax rate that prevents the company from being
double taxed.
LLC - Correct answer-Personal tax rate, not liable for company's debt. Ideal for
single owner seeking low risk.
Partnership - Correct answer-Two or more people. Shared financial banking.
Founder - Correct answer-Creates the company
CFO (Chief Financial Officer) - Correct answer-Oversees company's finances
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, Stockholder - Correct answer-Owns stock in the company
CEO (Chief Executive Officer) - Correct answer-Reports to the board of directors
COO (Chief Operating Officer) - Correct answer-Oversees daily operational and
administrative functions
Stakeholder - Correct answer-Has vested interest in the success of the company.
Equity - Correct answer-Non-Cash compensation
Hourly - Correct answer-Set rate of pay hours worked
Commission - Correct answer-Usually found in sales
salary - Correct answer-Set amount of pay in a given period
Correct order of the business life cycle - Correct answer-Existence
Survival
Success
Take-off
Resource maturity(owner separates from company)
Pivot or persist(continue to grow or new project)
Exit plan
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
