ESB EXAM QUESTIONS WITH CORRECT
ANSWERS 2026-2027
what two characteristics define a small business? - CORRECT ANSWER -
fewer than 1,500 employees and less than $35.5 million revenue
physical businesses - CORRECT ANSWER -
sell their goods or services onsite (bakery and hair salon)
digital businesses - CORRECT ANSWER -
sell their goods or services online (online stores and bookstore on amazon)
c-corporation - CORRECT ANSWER -- company plans to sell stock to public one day
- unlimited owners
- shareholders not responsible for business liabilities
- taxed twice
s-corporation - CORRECT ANSWER -- similar to c-corporation but for small businesses
- 100 shareholders maximum
- shareholders not responsible for business liabilities
- taxed once
sole proprietorship - CORRECT ANSWER -- easy set-up (less paperwork)
- one owner maximum
- owner is personally responsible for business liabilities
- no personal liability protection
- taxed once
, limited liability company (LLC) - CORRECT ANSWER --
popular for businesses concerned with liability protection
- unlimited owners, cannot go public
- members are not personally responsible for business liabilities
- choose how to be taxed
chief executive officer (CEO) - CORRECT ANSWER -
highest ranking employee in the company; reports to the board of directors
chief financial officer (CFO) - CORRECT ANSWER -
creates budgets, analyzes financial data, and forecasts company profits
chief information officer (CIO) - CORRECT ANSWER -
develops policies and structures to protect company data
chief operating officer (COO) - CORRECT ANSWER -oversees the day-to-
day administrative functions of a business; second in command
maturity (business life cycle) - CORRECT ANSWER -
the business is separate from the owner with responsibilities delegated to staff. a business in thi
s stage usually commands a considerable share of the market and may even be a household nam
e. (5)
success (business life cycle) - CORRECT ANSWER -company is stable and profitable (3)
takeoff (business life cycle) - CORRECT ANSWER -
expansion strategies are implemented, and investment is balanced with potential (4)
ANSWERS 2026-2027
what two characteristics define a small business? - CORRECT ANSWER -
fewer than 1,500 employees and less than $35.5 million revenue
physical businesses - CORRECT ANSWER -
sell their goods or services onsite (bakery and hair salon)
digital businesses - CORRECT ANSWER -
sell their goods or services online (online stores and bookstore on amazon)
c-corporation - CORRECT ANSWER -- company plans to sell stock to public one day
- unlimited owners
- shareholders not responsible for business liabilities
- taxed twice
s-corporation - CORRECT ANSWER -- similar to c-corporation but for small businesses
- 100 shareholders maximum
- shareholders not responsible for business liabilities
- taxed once
sole proprietorship - CORRECT ANSWER -- easy set-up (less paperwork)
- one owner maximum
- owner is personally responsible for business liabilities
- no personal liability protection
- taxed once
, limited liability company (LLC) - CORRECT ANSWER --
popular for businesses concerned with liability protection
- unlimited owners, cannot go public
- members are not personally responsible for business liabilities
- choose how to be taxed
chief executive officer (CEO) - CORRECT ANSWER -
highest ranking employee in the company; reports to the board of directors
chief financial officer (CFO) - CORRECT ANSWER -
creates budgets, analyzes financial data, and forecasts company profits
chief information officer (CIO) - CORRECT ANSWER -
develops policies and structures to protect company data
chief operating officer (COO) - CORRECT ANSWER -oversees the day-to-
day administrative functions of a business; second in command
maturity (business life cycle) - CORRECT ANSWER -
the business is separate from the owner with responsibilities delegated to staff. a business in thi
s stage usually commands a considerable share of the market and may even be a household nam
e. (5)
success (business life cycle) - CORRECT ANSWER -company is stable and profitable (3)
takeoff (business life cycle) - CORRECT ANSWER -
expansion strategies are implemented, and investment is balanced with potential (4)
