CS175CSET Business Subtest I Practice Exam
**Question 1. Which form of ownership provides unlimited personal liability to its
owners but allows complete managerial control?**
A) Limited liability company (LLC)
B) Sole proprietorship
C) S‑Corporation
D) General partnership
Answer: B
Explanation: In a sole proprietorship the single owner is personally liable for all
debts, and also makes all decisions.
**Question 2. In a matrix organizational structure, authority is primarily derived
from which two sources?**
A) Functional managers and product managers
B) Geographic regions and customer segments
C) Board of directors and shareholders
D) CEOs and CFOs
Answer: A
Explanation: A matrix structure blends functional and product (or project) lines,
giving employees dual reporting to both functional and product managers.
**Question 3. Which of the following is the first step in the entrepreneurial
process?**
A) Securing financing
, CS175CSET Business Subtest I Practice Exam
B) Conducting market research
C) Developing a business plan
D) Identifying a business opportunity
Answer: D
Explanation: Recognizing a viable opportunity precedes research, planning, and
financing.
**Question 4. A multinational corporation (MNC) is most directly affected by
which of the following?**
A) State income tax rates
B) Local zoning ordinances
C) Exchange rate fluctuations
D) City council ordinances
Answer: C
Explanation: MNCs operate across borders, so changes in currency values impact
costs and revenues.
**Question 5. Which management function involves establishing performance
standards and measuring actual performance?**
A) Planning
B) Organizing
C) Leading
, CS175CSET Business Subtest I Practice Exam
D) Controlling
Answer: D
Explanation: Controlling includes setting standards, monitoring, and correcting
deviations.
**Question 6. A leader who encourages team members to share ideas and
participate in decision‑making is using which style?**
A) Autocratic
B) Democratic
C) Laissez‑faire
D) Transactional
Answer: B
Explanation: Democratic leadership values input and collaborative
decision‑making.
**Question 7. Which HR activity is most closely associated with “selection”?**
A) Conducting job analysis
B) Administering performance appraisals
C) Interviewing candidates
D) Designing compensation packages
Answer: C
, CS175CSET Business Subtest I Practice Exam
Explanation: Selection refers to choosing the best applicant, often through
interviews and assessments.
**Question 8. According to Maslow, which need is highest in the hierarchy?**
A) Safety needs
B) Esteem needs
C) Self‑actualization
D) Physiological needs
Answer: C
Explanation: Self‑actualization sits at the top of Maslow’s five‑level hierarchy.
**Question 9. An ERP system primarily helps a firm to:**
A) Increase social media presence
B) Integrate all functional data into a single database
C) Outsource its manufacturing processes
D) Conduct market research surveys
Answer: B
Explanation: Enterprise Resource Planning centralizes data across departments for
better coordination.
**Question 10. In B2B e‑commerce, which of the following transactions is most
typical?**
**Question 1. Which form of ownership provides unlimited personal liability to its
owners but allows complete managerial control?**
A) Limited liability company (LLC)
B) Sole proprietorship
C) S‑Corporation
D) General partnership
Answer: B
Explanation: In a sole proprietorship the single owner is personally liable for all
debts, and also makes all decisions.
**Question 2. In a matrix organizational structure, authority is primarily derived
from which two sources?**
A) Functional managers and product managers
B) Geographic regions and customer segments
C) Board of directors and shareholders
D) CEOs and CFOs
Answer: A
Explanation: A matrix structure blends functional and product (or project) lines,
giving employees dual reporting to both functional and product managers.
**Question 3. Which of the following is the first step in the entrepreneurial
process?**
A) Securing financing
, CS175CSET Business Subtest I Practice Exam
B) Conducting market research
C) Developing a business plan
D) Identifying a business opportunity
Answer: D
Explanation: Recognizing a viable opportunity precedes research, planning, and
financing.
**Question 4. A multinational corporation (MNC) is most directly affected by
which of the following?**
A) State income tax rates
B) Local zoning ordinances
C) Exchange rate fluctuations
D) City council ordinances
Answer: C
Explanation: MNCs operate across borders, so changes in currency values impact
costs and revenues.
**Question 5. Which management function involves establishing performance
standards and measuring actual performance?**
A) Planning
B) Organizing
C) Leading
, CS175CSET Business Subtest I Practice Exam
D) Controlling
Answer: D
Explanation: Controlling includes setting standards, monitoring, and correcting
deviations.
**Question 6. A leader who encourages team members to share ideas and
participate in decision‑making is using which style?**
A) Autocratic
B) Democratic
C) Laissez‑faire
D) Transactional
Answer: B
Explanation: Democratic leadership values input and collaborative
decision‑making.
**Question 7. Which HR activity is most closely associated with “selection”?**
A) Conducting job analysis
B) Administering performance appraisals
C) Interviewing candidates
D) Designing compensation packages
Answer: C
, CS175CSET Business Subtest I Practice Exam
Explanation: Selection refers to choosing the best applicant, often through
interviews and assessments.
**Question 8. According to Maslow, which need is highest in the hierarchy?**
A) Safety needs
B) Esteem needs
C) Self‑actualization
D) Physiological needs
Answer: C
Explanation: Self‑actualization sits at the top of Maslow’s five‑level hierarchy.
**Question 9. An ERP system primarily helps a firm to:**
A) Increase social media presence
B) Integrate all functional data into a single database
C) Outsource its manufacturing processes
D) Conduct market research surveys
Answer: B
Explanation: Enterprise Resource Planning centralizes data across departments for
better coordination.
**Question 10. In B2B e‑commerce, which of the following transactions is most
typical?**
