ESB Certification Exam Study Guide
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Domain 1 Lesson 1 - CORRECT ANSWER -
The key objective of a small business owner is to generate ____ - CORRECT ANSWER -
profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow their
businesses rapidly - CORRECT ANSWER - risks
Tangible items that require pick-up or delivery are ____ products - CORRECT ANSWER -
physical
When a ____ purchases an item from a business, it is a business-to-consumer transaction -
CORRECT ANSWER - customer
____ are for-profit corporations with limited liability - CORRECT ANSWER -S
corporations
____ are ideal for international businesses - CORRECT ANSWER - C corporations
The ____ oversees daily operational and administrative functions - CORRECT
ANSWER - Chief Operating Officer
A ____ votes on the management of a company - CORRECT ANSWER - stockholder
____ employees are paid a fixed amount each pay period - CORRECT ANSWER - Salary
,Businesses can compensate employees for work they produce when being paid by ____ -
CORRECT ANSWER - piece work
Businesses can offer ____ in addition to a lower salary - CORRECT ANSWER - equity
During the ____ stage of the business life cycle, a company is regularly taking on new customers
and starting to generate a consistent income - CORRECT ANSWER - survival
The owner may decide to sell their ownership in the company during the ____ stage -
CORRECT ANSWER - exit plan
The five elements of the design thinking process are ____ - CORRECT ANSWER -
empathize, define, ideate, prototype , and test
____ allows one to see and experience a customer's perspective - CORRECT ANSWER -
Empathy
The design team creates multiple inexpensive versions of a product, known as ____ - CORRECT
ANSWER - Minimum Viable Products
Name benefits of a franchise - CORRECT ANSWER - less risk involved, tested
operational processes, or recognized brands
No ownership, no US federal taxes - CORRECT ANSWER - Non-profit
Best for international business even with being double-taxed - CORRECT ANSWER -C
corporation
, Easy to create but comes with unlimited liability - CORRECT ANSWER - Sole
proprietorship
Lower tax rate that prevents the company from being double-taxed - CORRECT
ANSWER - S corporation
Ideal for a single owner seeking low risk - CORRECT ANSWER - LLC (limited liability
company)
Shared financial backing - CORRECT ANSWER - Partnership
Creates the company - CORRECT ANSWER - Founder
Oversees company finances - CORRECT ANSWER - CFO
Owns stock in the company - CORRECT ANSWER - Stockholder
Reports to the board of directors - CORRECT ANSWER - CEO
Oversees daily operational and administrative functions Stakeholder Has a vested interest in the
success of the company - CORRECT ANSWER - COO
Has a vested interest in the success of the company - CORRECT ANSWER - Stakeholder
Non-cash compensation - CORRECT ANSWER - Equity
Set rate of pay for hours worked - CORRECT ANSWER - Hourly
UPDATED ACTUAL Exam Questions and
CORRECT Answers
Domain 1 Lesson 1 - CORRECT ANSWER -
The key objective of a small business owner is to generate ____ - CORRECT ANSWER -
profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow their
businesses rapidly - CORRECT ANSWER - risks
Tangible items that require pick-up or delivery are ____ products - CORRECT ANSWER -
physical
When a ____ purchases an item from a business, it is a business-to-consumer transaction -
CORRECT ANSWER - customer
____ are for-profit corporations with limited liability - CORRECT ANSWER -S
corporations
____ are ideal for international businesses - CORRECT ANSWER - C corporations
The ____ oversees daily operational and administrative functions - CORRECT
ANSWER - Chief Operating Officer
A ____ votes on the management of a company - CORRECT ANSWER - stockholder
____ employees are paid a fixed amount each pay period - CORRECT ANSWER - Salary
,Businesses can compensate employees for work they produce when being paid by ____ -
CORRECT ANSWER - piece work
Businesses can offer ____ in addition to a lower salary - CORRECT ANSWER - equity
During the ____ stage of the business life cycle, a company is regularly taking on new customers
and starting to generate a consistent income - CORRECT ANSWER - survival
The owner may decide to sell their ownership in the company during the ____ stage -
CORRECT ANSWER - exit plan
The five elements of the design thinking process are ____ - CORRECT ANSWER -
empathize, define, ideate, prototype , and test
____ allows one to see and experience a customer's perspective - CORRECT ANSWER -
Empathy
The design team creates multiple inexpensive versions of a product, known as ____ - CORRECT
ANSWER - Minimum Viable Products
Name benefits of a franchise - CORRECT ANSWER - less risk involved, tested
operational processes, or recognized brands
No ownership, no US federal taxes - CORRECT ANSWER - Non-profit
Best for international business even with being double-taxed - CORRECT ANSWER -C
corporation
, Easy to create but comes with unlimited liability - CORRECT ANSWER - Sole
proprietorship
Lower tax rate that prevents the company from being double-taxed - CORRECT
ANSWER - S corporation
Ideal for a single owner seeking low risk - CORRECT ANSWER - LLC (limited liability
company)
Shared financial backing - CORRECT ANSWER - Partnership
Creates the company - CORRECT ANSWER - Founder
Oversees company finances - CORRECT ANSWER - CFO
Owns stock in the company - CORRECT ANSWER - Stockholder
Reports to the board of directors - CORRECT ANSWER - CEO
Oversees daily operational and administrative functions Stakeholder Has a vested interest in the
success of the company - CORRECT ANSWER - COO
Has a vested interest in the success of the company - CORRECT ANSWER - Stakeholder
Non-cash compensation - CORRECT ANSWER - Equity
Set rate of pay for hours worked - CORRECT ANSWER - Hourly
