BUSINESS AND LAW EXAM LEVEL 1 LATEST
2026 VERSION WITH 100 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED
A+||BRAND NEW VERSION!!
1. Which of the following is a primary function of a business?
A. To create laws
B. To earn a profit
C. To enforce contracts
D. To regulate employment
B. To earn a profit Businesses exist primarily to generate profit by providing
goods or services.
2. What is the legal structure where a business is owned by one individual and
there is no legal distinction between the owner and the business?
A. Corporation
B. Partnership
C. Sole proprietorship
D. Limited liability company
C. Sole proprietorship In a sole proprietorship, the owner assumes all
responsibility for debts and obligations.
3. Which of the following best describes a partnership?
A. A business owned by a single individual
B. A business where ownership is shared between two or more individuals
C. A separate legal entity from its owners
D. A business with limited liability for owners
B. A business where ownership is shared between two or more individuals
Partnerships involve shared ownership and responsibilities among partners.
,4. Which document is necessary to legally form a corporation?
A. Partnership agreement
B. Articles of incorporation
C. Business license
D. Memorandum of understanding
B. Articles of incorporation Articles of incorporation are filed with the state
to legally establish a corporation.
5. Which of the following is considered an intangible asset?
A. Land
B. Machinery
C. Trademark
D. Inventory
C. Trademark Intangible assets are non-physical assets that add value, such
as trademarks, patents, or copyrights.
6. The law that protects consumers from unsafe products is called:
A. Labor law
B. Contract law
C. Consumer protection law
D. Environmental law
C. Consumer protection law Consumer protection laws ensure products are
safe and meet required standards.
7. Which of these is an example of a fixed cost?
A. Electricity bill
B. Rent for office space
C. Raw materials
D. Commissions to sales staff
B. Rent for office space Fixed costs remain constant regardless of
production levels.
8. Which of the following is a responsibility of employers under labor law?
A. Paying taxes
B. Providing safe working conditions
, C. Selling products
D. Drafting business plans
B. Providing safe working conditions Labor laws require employers to
ensure safety and health for employees.
9. A contract requires which of the following elements to be legally
enforceable?
A. Offer, acceptance, consideration
B. Negotiation, signature, payment
C. Witnesses, notarization, seal
D. Approval, licensing, delivery
A. Offer, acceptance, consideration A valid contract requires an offer,
acceptance of the offer, and something of value exchanged (consideration).
10.Which type of business ownership offers limited liability but is taxed like a
partnership?
A. Sole proprietorship
B. Corporation
C. Limited liability company (LLC)
D. Cooperative
C. Limited liability company (LLC) An LLC protects owners’ personal assets
while allowing pass-through taxation.
11.What is the primary purpose of a business plan?
A. To hire employees
B. To set goals and guide operations
C. To create legal documents
D. To enforce contracts
B. To set goals and guide operations Business plans outline strategies,
goals, and methods for running the business.
12.What does the term "liabilities" refer to in accounting?
A. Money owned by the business to others
B. Money owed to the business by others
C. Total assets of a business
2026 VERSION WITH 100 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED
A+||BRAND NEW VERSION!!
1. Which of the following is a primary function of a business?
A. To create laws
B. To earn a profit
C. To enforce contracts
D. To regulate employment
B. To earn a profit Businesses exist primarily to generate profit by providing
goods or services.
2. What is the legal structure where a business is owned by one individual and
there is no legal distinction between the owner and the business?
A. Corporation
B. Partnership
C. Sole proprietorship
D. Limited liability company
C. Sole proprietorship In a sole proprietorship, the owner assumes all
responsibility for debts and obligations.
3. Which of the following best describes a partnership?
A. A business owned by a single individual
B. A business where ownership is shared between two or more individuals
C. A separate legal entity from its owners
D. A business with limited liability for owners
B. A business where ownership is shared between two or more individuals
Partnerships involve shared ownership and responsibilities among partners.
,4. Which document is necessary to legally form a corporation?
A. Partnership agreement
B. Articles of incorporation
C. Business license
D. Memorandum of understanding
B. Articles of incorporation Articles of incorporation are filed with the state
to legally establish a corporation.
5. Which of the following is considered an intangible asset?
A. Land
B. Machinery
C. Trademark
D. Inventory
C. Trademark Intangible assets are non-physical assets that add value, such
as trademarks, patents, or copyrights.
6. The law that protects consumers from unsafe products is called:
A. Labor law
B. Contract law
C. Consumer protection law
D. Environmental law
C. Consumer protection law Consumer protection laws ensure products are
safe and meet required standards.
7. Which of these is an example of a fixed cost?
A. Electricity bill
B. Rent for office space
C. Raw materials
D. Commissions to sales staff
B. Rent for office space Fixed costs remain constant regardless of
production levels.
8. Which of the following is a responsibility of employers under labor law?
A. Paying taxes
B. Providing safe working conditions
, C. Selling products
D. Drafting business plans
B. Providing safe working conditions Labor laws require employers to
ensure safety and health for employees.
9. A contract requires which of the following elements to be legally
enforceable?
A. Offer, acceptance, consideration
B. Negotiation, signature, payment
C. Witnesses, notarization, seal
D. Approval, licensing, delivery
A. Offer, acceptance, consideration A valid contract requires an offer,
acceptance of the offer, and something of value exchanged (consideration).
10.Which type of business ownership offers limited liability but is taxed like a
partnership?
A. Sole proprietorship
B. Corporation
C. Limited liability company (LLC)
D. Cooperative
C. Limited liability company (LLC) An LLC protects owners’ personal assets
while allowing pass-through taxation.
11.What is the primary purpose of a business plan?
A. To hire employees
B. To set goals and guide operations
C. To create legal documents
D. To enforce contracts
B. To set goals and guide operations Business plans outline strategies,
goals, and methods for running the business.
12.What does the term "liabilities" refer to in accounting?
A. Money owned by the business to others
B. Money owed to the business by others
C. Total assets of a business
