ESB Practice Exam 1 Questions and Answers (Graded A+)

What is entrepreneurship? - ANSWER-Setting up a business with the aim to make a profit. B2B - ANSWER-Purchases requiring a tax exemption certificate; wholesale flooring distributor B2C - ANSWER-motorcycle repair shop; chain of local grocery stores S - Corporation - ANSWER-offers many of the same benefits as a c corporation, but better for small businesses. 100 shareholders maximum allowed. all must be US citizens or residents. shareholders are not personally responsible for business liabilities. c-corporation - ANSWER-best if the company plans to someday sell stock to the public; can issue shares to founders, employees, and investors. unlimited owners (aka shareholders) allowed. shareholders are not personally responsible for business liabilities. taxed twice - business pays at the corporate level, and shareholders pay on income received. a separate tax return is required for the business sole proprietorship - ANSWER-best if you need an easy set-up. you may still need a dba or business licenses to operate legally, but no other paperwork one owner maximum. the owner is personally responsible for business liabilities. no personal liability protection. taxed once - you pay on profits in your personal tax return. separate tax return not needed Limited Liability Company (LLC) - ANSWER-popular choice for business concerned about liability protection. unlimited owners (aka members) allowed. no shareholders. llcs cannot go public. members are not personally responsible for business liabilities. an llc can choose how to be taxed by filing form 8832 with the irs. an llc can elect to be taxed as a sole proprietorship, partnership, s corp, or c corp. an llc is not recognized globally; ypu may be taxed as a corporation in other countries. owners of equity - ANSWER-founders, partners, and shareholders an example of ______ compensation is paying field laborers for the amount of fruit they pick - ANSWER-piece work a _______ employee receives a set amount of pay each month without overtime compensation for extra hours worked - ANSWER-salary employees most affected by minimum wage laws are compensated - ANSWER-hourly an employee who is paid a percentage of a sale is paid by - ANSWER-commission business life cycle - ANSWER-1. existence 2. survival of the fittest 3. success 4. takeoff 5. maturity test - ANSWER-try your solutions - evaluators rigorously test the prototypes. although this is the final phase, design thinking is iterative: teams often use the results to redefine one or more further problems. so, you can return to previous stages to make further iterations, alterations and refinements - to find or rule out alternative solutions. prototype - ANSWER-create solutions - this is an experimental phase. the aim is to identify the best possible solution for each problem . your team should produce some inexpensive, scaled-down versions of the product (or specific features within the product) to investigate the ideas you've generated. this could be as simple as paper prototyping. ideate - ANSWER-challenge assumptions and create ideas - the background of knowledge acquired from the first two phases means you can start to "think outside the box", look for alternative ways to view the problem and identify innovative solutions to the problem statement you created in the define stage. brainstorming define - ANSWER-state your users' needs and problems- accumulate the information gathered during the empathize stage. you then analyze observations and synthesize them to define the core problems you and your team have identified. problem statements. empathize - ANSWER-Research your users' needs