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ESB CERTIFICATION EXAM STUDY
GUIDE QUESTIONS AND 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
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____ 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
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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
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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
ESB CERTIFICATION EXAM STUDY
GUIDE QUESTIONS AND 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
,2 | Page
____ 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
,3 | Page
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
, 4 | Page
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
