DECA Entrepreneurship Vocabulary Exam Questions with Detailed Answers Latest Update 2024
(Already Passed)
acquisition: - Answers The purchase of a company by another, larger firm, which absorbs the smaller
company into its operations.
board of directors: - Answers A group of individuals elected by a firm's shareholders and charged with
overseeing, and taking legal responsibility for, the firm's actions.
business plan: - Answers Document in which the entrepreneur summarizes her or his business strategy
for the proposed new venture and how that strategy will be implemented.
chief executive officer (CEO): - Answers The person responsible for the firm's overall performance.
co-operative: - Answers An organization that is formed to benefit its owners in the form of reduced
prices and/or the distribution of surpluses at year-end.
common stock: - Answers Shares whose owners usually have last claim on the corporation's assets (after
creditors and owners of preferred stock) but who have voting rights in the firm.
conglomerate merger: - Answers A merger of two firms in completely unrelated businesses.
corporate governance: - Answers The relationship between shareholders, the board of directors, and
other top managers in the corporation.
divestiture: - Answers Occurs when a company sells part of its existing business operations to another
company.
employee stock ownership plan (ESOP): - Answers when a corporation buys its own stock with loaned
funds and giving them to its employees. Employees "earn'' the stock based on some condition such as
seniority. Employees control the stock's voting rights immediately, even though they may not take
physical possession of the stock until specified conditions are met. This aligns the employees' interest
with those of the shareholders, as they are shareholders themselves.
entrepreneur: - Answers A business person who accepts both the risks and the opportunities involved in
creating and operating a new business venture.
franchise: - Answers a form of business by which the owner (franchisor) of a product, service or method
obtains distribution/marketing through affiliated dealers (franchisees). example: mcdonalds
franchising agreement: - Answers Specifies the duties and responsibilities of the franchisee and the
franchiser.
friendly takeover: - Answers An acquisition in which the management of the acquired company
welcomes the firm's buyout by another company.
, general partner: - Answers A partner who is actively involved in managing the firm and has unlimited
liability.
horizontal merger: - Answers A merger of two firms that have previously been direct competitors in the
same industry.
hostile takeover: - Answers An acquisition in which the management of the acquired company fights the
firm's buyout by another company.
initial public offering (IPO): - Answers Selling shares of stock in a company for the first time to the
general investing public.
inside directors: - Answers Members of a corporation's board of directors who are also full-time
employees of the corporation.
limited liability: - Answers Investor liability is limited to their personal investments in the corporation;
courts cannot touch the personal assets of investors in the event that the corporation goes bankrupt.
limited partner: - Answers A partner who generally does not participate actively in the business, and
whose liability is limited to the amount invested in the partnership.
merger: - Answers The union of two companies to form a single new business.
microenterprise: - Answers An enterprise that the owner operates part-time from the home while
continuing regular employment elsewhere.
outside directors: - Answers Members of a corporation's board of directors who are not also employees
of the corporation on a day-to-day basis.
parent corporation: - Answers A corporation that owns a subsidiary.
partnership: - Answers A business with two or more owners who share in the operation of the firm and
in financial responsibility for the firm's debts.
preferred stock: - Answers Shares whose owners have first claim on the corporation's assets and profits
but who usually have no voting rights in the firm.
private corporation: - Answers A business whose stock is held by a small group of individuals and is not
usually available for sale to the general public.
public corporation: - Answers A business whose stock is widely held and available for sale to the general
public.
small business: - Answers An independently owned and managed business that does not dominate its
market.
(Already Passed)
acquisition: - Answers The purchase of a company by another, larger firm, which absorbs the smaller
company into its operations.
board of directors: - Answers A group of individuals elected by a firm's shareholders and charged with
overseeing, and taking legal responsibility for, the firm's actions.
business plan: - Answers Document in which the entrepreneur summarizes her or his business strategy
for the proposed new venture and how that strategy will be implemented.
chief executive officer (CEO): - Answers The person responsible for the firm's overall performance.
co-operative: - Answers An organization that is formed to benefit its owners in the form of reduced
prices and/or the distribution of surpluses at year-end.
common stock: - Answers Shares whose owners usually have last claim on the corporation's assets (after
creditors and owners of preferred stock) but who have voting rights in the firm.
conglomerate merger: - Answers A merger of two firms in completely unrelated businesses.
corporate governance: - Answers The relationship between shareholders, the board of directors, and
other top managers in the corporation.
divestiture: - Answers Occurs when a company sells part of its existing business operations to another
company.
employee stock ownership plan (ESOP): - Answers when a corporation buys its own stock with loaned
funds and giving them to its employees. Employees "earn'' the stock based on some condition such as
seniority. Employees control the stock's voting rights immediately, even though they may not take
physical possession of the stock until specified conditions are met. This aligns the employees' interest
with those of the shareholders, as they are shareholders themselves.
entrepreneur: - Answers A business person who accepts both the risks and the opportunities involved in
creating and operating a new business venture.
franchise: - Answers a form of business by which the owner (franchisor) of a product, service or method
obtains distribution/marketing through affiliated dealers (franchisees). example: mcdonalds
franchising agreement: - Answers Specifies the duties and responsibilities of the franchisee and the
franchiser.
friendly takeover: - Answers An acquisition in which the management of the acquired company
welcomes the firm's buyout by another company.
, general partner: - Answers A partner who is actively involved in managing the firm and has unlimited
liability.
horizontal merger: - Answers A merger of two firms that have previously been direct competitors in the
same industry.
hostile takeover: - Answers An acquisition in which the management of the acquired company fights the
firm's buyout by another company.
initial public offering (IPO): - Answers Selling shares of stock in a company for the first time to the
general investing public.
inside directors: - Answers Members of a corporation's board of directors who are also full-time
employees of the corporation.
limited liability: - Answers Investor liability is limited to their personal investments in the corporation;
courts cannot touch the personal assets of investors in the event that the corporation goes bankrupt.
limited partner: - Answers A partner who generally does not participate actively in the business, and
whose liability is limited to the amount invested in the partnership.
merger: - Answers The union of two companies to form a single new business.
microenterprise: - Answers An enterprise that the owner operates part-time from the home while
continuing regular employment elsewhere.
outside directors: - Answers Members of a corporation's board of directors who are not also employees
of the corporation on a day-to-day basis.
parent corporation: - Answers A corporation that owns a subsidiary.
partnership: - Answers A business with two or more owners who share in the operation of the firm and
in financial responsibility for the firm's debts.
preferred stock: - Answers Shares whose owners have first claim on the corporation's assets and profits
but who usually have no voting rights in the firm.
private corporation: - Answers A business whose stock is held by a small group of individuals and is not
usually available for sale to the general public.
public corporation: - Answers A business whose stock is widely held and available for sale to the general
public.
small business: - Answers An independently owned and managed business that does not dominate its
market.
