Course: Be the Boss - Starting Your Own Business

Q: A sole proprietor does not always need to register a DBA
- True
- False
A: True
If right: That is correct.
If wrong: That’s not correct. A Sole proprietor only needs to register a DBA if they name the company something other than their own name.

Q: All businesses with at least one employee beside you must have an EIN.
- True
- False
A: True
If right: That is correct.
If wrong: That's incorrect. 'All business with at least one employee beside you must have an EIN' is true.

Q: Cash flow can be defined as:
- Sales minus Cost of Goods Sold
- Moving cash in or out of a business
- Balance of cash received less the amount of cash paid out over a period of time
A: Moving cash in or out of a business; Balance of cash received less the amount of cash paid out over a period of time
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Moving cash in or out of a business Balance of cash received less the amount of cash paid out over a period of time

Q: Companies with online sales have specific business software needs.
- True
- False
A: True
If right: That is correct.
If wrong: That’s not correct. The correct answer is: True. Companies with online sales have specific business software needs.

Q: Early risk warning signs can be identified as:
- Accounting irregularities
- Lower competitor prices
- Lack of diversification
- Increase in rent price
- High debt to earnings ratio
- Lack of diversification
- Zoning laws
- Broken equipment
- High employee turnover
- SWOT Analysis
- Vendor closing
A: High debt to earnings ratio; Lack of diversification; High employee turnover
If right: That is correct.
If wrong: That’s not correct. The correct answer is: Accounting irregularities High debt to earnings ratio Lack of diversification High employee turnover

Q: Elements of a small business loan package are:
- Business plan
- Business financial statements
- Business tax returns
- Credit report
- Collateral
- Personal financial statements
- Personal tax returns
- Purchase agreements
A: Business plan; Business financial statements; Business tax returns; Credit report; Collateral; Personal financial statements; Personal tax returns; Purchase agreements
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Business plan Business financial statements Business tax returns Credit report Collateral Personal financial statements Personal tax returns Purchase agreements

Q: Examples of record keeping tools are:
- Manila folder
- Computer system
- File hosting system
A: Manila folder; Computer system; File hosting system
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Manila folder Computer system File hosting system

Q: For most small businesses, debt financing comes from owner or family savings and it is frequently the only source of funds for start-up small businesses.
- True
- False
A: True
If right: That is correct.
If wrong: That is incorrect. The correct answer is: True

Q: Good uses of cash flow projection are:
- Setting sales and expense goals
- Determining the break-even point for a business
- Tracking sales
- Planning equipment purchases
- Tracking liquidity
A: Setting sales and expense goals; Determining the break-even point for a business; Tracking sales; Planning equipment purchases; Tracking liquidity
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Setting sales and expense goals Determining the break-even point for a business Tracking sales Planning equipment purchases Tracking liquidity

Q: If you are self-employed and have not incorporated, which tax form would you use when you file your taxes?
- Form 1040, Schedule C or C-EZ
- Form 1065
- Form 1120S
- Form W2
A: Form 1040, Schedule C or C-EZ
If right: That is correct.
If wrong: That is incorrect. The correct answer is: 1040, Schedule C or C-EZ.

Q: Internet advertising
- must be truthful
- must have all claims include proof
- must honor requests for list removal
- is regulated by the FCC
A: must be truthful; must have all claims include proof; must honor requests for list removal
If right: That is correct.
If wrong: That is incorrect. The correct answer is: It must be truthful All claims must include proof Requests for list removal must be honored

Q: It is possible to create a business plan that identifies every risk your business might face.
- True
- False
A: False
If right: That is correct.
If wrong: That is incorrect. The correct answer is: False.

Q: Most business valuation methods are a combination of two factors.
- Revenue stream and assets
- Customer base and net worth
- Gross profit and assets
- Revenue stream and net worth
A: Revenue stream and assets
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Revenue stream and assets.

Q: Most business valuation methods are a combination of what two factors?
- Revenue stream and net worth
- Customer base and net worth
- Tax obligations
- Revenue stream and assets
- Gross profit and assets
A: Revenue stream and assets
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Revenue stream and assets.

Q: New businesses should start financial management with a(n) _______________________?
- Business credit card
- Budget
- Inventory purchase
- Profit and Loss Statement
A: Budget
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Budget

Q: Obtaining information on a consumer under false pretenses may cause you to be:
- Fined
- Imprisoned for up to two years
- Both fined and imprisoned for up to two years
A: Both fined and imprisoned for up to two years
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Both fined and imprisoned for up to two years.

Q: Public Relations can be described as
- One-way communication
- Media controls the timing
- Business determines the message
- An intention to generally inform the public
A: Media controls the timing; An intention to generally inform the public
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Media controls the timing Intention is to generally inform the public

Q: Reasons for good financial management are
- Helps to show which products or services are profitable
- Provides information on the size of a loan a business can afford
- Helps in deciding what inventory a business should purchase
- It's a tool for planning to reach new markets
A: Helps to show which products or services are profitable; Provides information on the size of a loan a business can afford; Helps in deciding what inventory a business should purchase; It's a tool for planning to reach new markets
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Helps to show which products or services are profitable Provides information on the size of a loan a business can afford Helps in deciding what inventory a business should purchase It’s a tool for planning to reach new markets

Q: Reasons for keeping good records are:
- Business detail tracking
- Planning
- Legal compliance
- Tax preparation
A: Business detail tracking; Planning; Legal compliance; Tax preparation
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Business detail tracking Planning Legal compliance Tax preparation

Q: Record keeping a good practice for which type(s) of small business
- Sole proprietor
- Partnership
- Corporation
A: Sole proprietor; Partnership; Corporation
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Sole proprietor Partnership Corporation

Q: Record keeping is the orderly and ____________________ practice of storing business records.
- Corporate
- Legal
- Financial
- Disciplined
A: Disciplined
If right: That is correct.
If wrong: That's not correct. The correct answer is: Disciplined.

Q: Registering a business name is performed on which of the following levels?
- Federal
- State or Local
- County
- Industry
A: State or Local
If right: That is correct.
If wrong: That is incorrect. State or local is the correct answer.

Q: Small business retirement plans are not currently recognized by the IRS.
- True
- False
A: False
If right: That is correct.
If wrong: That is incorrect. The correct answer is: False.

Q: Small business retirement plans are not recognized by the Internal Revenue Service (IRS).
- True
- False
A: False
If right: That is correct.
If wrong: That’s not correct. The correct answer is: False

Q: Sound bookkeeping is the basis for all financial management.
- True
- False
A: True
If right: That is correct.
If wrong: That is incorrect. The correct answer is: True

Q: Succession planning deals with the process of ___________.
- Determining a plan for your business over the next five years
- Identifying buyers for your business
- Passing control of your business to others
- Selling your business to family members
A: Passing control of your business to others
If right: That is correct.
If wrong: That’s not correct. The correct answer is: Passing control of your business to others.

Q: Succession planning deals with the process of which of the following?
- Settling obligations before closing the business
- Identifying potential buyers for your business
- Passing control of your business to another individual
- Determine a five year plan for your business
A: Passing control of your business to another individual
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Passing control of your business to another individual.

Q: The CAN-SPAM act covers
- Email messages must contain all business contact information
- Requests to be removed must be honored
- Emails that may not be sent through another person’s account
- Emails must include a message that they are an advertisement
- Emails that blatantly solicit are prohibited
- Businesses are not liable if a company sends spam on their behalf
- Emails must not falsify the transmission information
A: Requests to be removed must be honored; Emails that may not be sent through another person’s account; Emails must include a message that they are an advertisement; Emails must not falsify the transmission information
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Requests to be removed must be honored Emails may not be sent through another person’s account Emails must include a message that they are an advertisement Emails must not falsify the transmission information

Q: The Fair Credit Billing Act may require you to promptly process returns you accept from customers who had paid you using their credit card.
- True
- False
A: True
If right: That is correct.
If wrong: That's not correct. The correct answer is True. The Fair Credit Billing Act may require you to promptly process returns you accept from customers who had paid you using their credit card.

Q: The Fair Credit Reporting Act sets forth legal requirements for your business in all aspects of the credit reporting process, from furnishing credit information to an agency to using credit reports ordered from an agency.
- True
- False
A: True
If right: That is correct.
If wrong: That's not correct. The correct answer is True. The Fair Credit Reporting Act sets forth legal requirements for your business in all aspects of the credit reporting process, from furnishing credit information to an agency to using credit reports ordered from an agency.

Q: The main purpose of recordkeeping is to maintain legal compliance and prepare for taxes.
- True
- False
A: False
If right: That is correct.
If wrong: That’s not correct. The correct answer is: False. The main purpose of recordkeeping is to understand the health of your business.

Q: What are the primary taxes businesses pay?
- Income tax
- Self-employment tax
- State income tax
- Luxury tax
- Local taxes
A: Income tax; Self-employment tax; State income tax; Local taxes
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Income tax, Self-employment tax, State income tax, and Local taxes.

Q: What are the two basic accounting methods?
- Cash
- Debit
- Accrual
- Fiscal
A: Cash; Accrual
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Cash and Accrual.

Q: What is the basic formula for a profit and loss statement?
- + Sources of Cash
- Operating Uses of Cash
- Non-operating Uses of Cash
= Ending Cash
- + Sales
- Cost of Goods Sold
= Gross Profit
- Overhead
= Net Profit
- + Purchase Price
- Cost of Goods Sold
= Profit
- + Cash Flow
+ Cash Flow from Financing
+ Cash Flow from Investments
= Net Cash Flow
A: + Sales
- Cost of Goods Sold
= Gross Profit
- Overhead
= Net Profit
If right: That is correct.
If wrong: That is incorrect. The correct answer is: + Sales - Cost of Goods Sold = Gross Profit - Overhead = Net Profit

Q: What is the main determining factor regarding whether or not your business will need federal licenses?
- Size
- Years in Business
- Type
- DBA
- Location
A: Type
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Type

Q: What must small businesses pay income tax on?
- Gross income
- Net profit
- Net income
- Gross profit
A: Net profit
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Net profit.

Q: When business owners pay themselves, it’s called _________________.
- Owner’s draw
- Check cashing
- Profit and loss
- Ownership transfer
A: Owner’s draw
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Owner’s draw

Q: When creating a record keeping system, it's a good idea to _________________________.
- Wait until enough information is available to get started.
- Start simple and refine later.
- Get a sophisticated system to anticipate future needs.
- Start after one year of operations.
A: Start simple and refine later.
If right: That is correct.
If wrong: That's not correct. The correct answer is: Start simple and refine later.

Q: When selling your business it is important to know both the buyer's financial ability and the buyer's management skills.
- True
- False
A: True
If right: That is correct.
If wrong: That is incorrect. The correct answer is: True.

Q: When selling your business, it's important to qualify the buyer for both access to capital and ability to run the business.
- True
- False
A: True
If right: That is correct.
If wrong: That is incorrect. The correct answer is: True.

Q: Where is the best place to start when looking for state agencies related to labor?
- U.S. Department of Labor
- Google Search
- IRS Website
- SBA.gov
A: U.S. Department of Labor
If right: That is correct.
If wrong: That's incorrect. The U.S. Department of Labor is the best place to start looking for state agencies related to labor.

Q: Which form reports employee’s annual wages and the amount of taxes withheld from their paycheck?
- W2
- W4
- Form 940
- Form 941
A: W2
If right: That is correct
If wrong: That is incorrect. The correct answer is: W2.

Q: Which of the following are common ways to avoid risk?
- Communicating risks you've identified to key employees
- Making your expectations clear to employees
- Developing support systems to care for your family needs
- Training staff on the business continuity plan
- Purchasing insurance
- Planning emergency contingencies
A: Communicating risks you've identified to key employees; Making your expectations clear to employees; Developing support systems to care for your family needs; Training staff on the business continuity plan; Purchasing insurance; Planning emergency contingencies
If wrong: That is incorrect. The correct answer is: all of the above answers apply

Q: Which of the following are reasons to sell your business?
- New job offer
- Profits are more than needs
- Market or industry changes
- Someone offers to buy
- Ready to retire
A: New job offer; Market or industry changes; Someone offers to buy; Ready to retire
If right: That is correct.
If wrong: That is incorrect. The correct answer is: New job offer, Market or industry changes, Someone offers to buy, Ready to retire.

Q: Which of the following can be considered incentives for customers to opt-in to email lists?
- Request for information
- HTML formatting
- Helpful hints
- Industry news
- Sales pitch
A: Helpful hints; Industry news
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Helpful hints Industry news

Q: Which of the following characteristics describe Advertising?
- Space and time must be purchased
- Media interprets the message
- Message sponsor is identified
- Provides more generalized images
A: Space and time must be purchased; Message sponsor is identified
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Space and time must be purchased, Message sponsor is identified

Q: Which of the following characteristics describe Business Accounting Software?
- Simulates paper-based calculations
- Allows you to run scenarios
- Instantly recalculates
- Keeps all financial records in one place
- Reduces human error
- Can be online or offline
- Allows you to lookup records easily
A: Keeps all financial records in one place; Reduces human error; Can be online or offline; Allows you to lookup records easily
If right: That is correct.
If wrong: That is not correct. The correct answer is: Keeps all financial records in one place Reduces human error Can be online or offline Allows you to lookup records easily

Q: Which of the following characteristics describe a LLC?
- Relies heavily on an agreement between the owners
- Must include Articles of Organization
- Provides some separation between business and owner finances
- Must file an “annual information return”
A: Must include Articles of Organization; Provides some separation between business and owner finances
If right: That is correct.
If wrong: That’s not correct. The correct answer is: Must include Articles of Organization Provides some separation between business and owner finances

Q: Which of the following characteristics describe cloud computing?
- Accessible anywhere
- Provides ongoing backups
- Usually scalable
- Requires an Internet connection
- Time-based
- Centered around events
A: Accessible anywhere; Provides ongoing backups; Usually scalable; Requires an Internet connection
If right: That is correct.
If wrong: That is not correct. The correct answer is: Accessible anywhere Provides ongoing backups Usually scalable Requires an Internet connection

Q: Which of the following characteristics describe paper tools?
- Inexpensive and easy to set up
- Usually locked up in a cabinet
- Tried and true method
- Provide instant calculations
- Easy to send from one person to another
A: Inexpensive and easy to set up; Usually locked up in a cabinet; Tried and true method
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Inexpensive and easy to set up Usually locked up in a cabinet Tried and true method

Q: Which of the following characteristics describes a Corporation?
- Easiest form of business structure
- Finances of the owner and the business are one
- Uses IRS Form 1120-A to report and pay taxes
- Usually features double taxation
A: Uses IRS Form 1120-A to report and pay taxes; Usually features double taxation
If right: That is correct.
If wrong: That’s not correct. The correct answer is: Uses IRS Form 1120-A to report and pay taxes Usually features double taxation

Q: Which of the following characteristics describes an S-Corporation?
- Formed to pursue a common need for the members
- Every vote carries the same weight regardless of share percentage
- Shareholders pay taxes directly on their own return
- Entity continues even when a shareholder leaves the business
A: Shareholders pay taxes directly on their own return; Entity continues even when a shareholder leaves the business
If right: That is correct.
If wrong: That’s not correct. The correct answer is: Shareholders pay taxes directly on their own return Entity continues even when a shareholder leaves the business

Q: Which of the following elements are required for obtaining a loan or other financing?
- Profitability Plan
- Fixed Assets
- Purchase Documentation
- Sweat Equity
- Credit Report
- Tax Returns
- Equity Contribution
- Credit Card
- Owner’s Draw
A: Profitability Plan; Purchase Documentation; Credit Report; Tax Returns; Equity Contribution
If right: That is correct.
If wrong: That is incorrect. The correct answer is: A Profitability Plan, Equity Contribution, Credit Report, Purchase Documentation, and a Tax Return are all elements required for obtaining a loan or other financing.

Q: Which of the following elements have an effect on credit and credit scoring?
- Amount of credit available
- DUNS identification number
- Number of credit reports provided
- Delinquent accounts
- Paying bills on time
- Ratio of credit balances to credit available
- Choice of credit reporting agency
- Fair Credit Billing Act
- Length of credit history
- Credit card disputes
- Credit inquiries
A: Amount of credit available; Delinquent accounts; Paying bills on time; Ratio of credit balances to credit available; Length of credit history
If right: That is correct.
If wrong: That is incorrect. Amount of credit available, Delinquent accounts, Paying bills on time, Ratio of credit balances to credit available, and Length of credit history are elements that effect on credit scoring.

Q: Which of the following forms is used to verify employee eligibility?
- W2
- W4
- I-9
- 941
A: I-9
If right: That is correct.
If wrong: That's incorrect. The I-9 is used to verify employee eligibility.

Q: Which of the following is an important measurement of whether or not your marketing methods are effective?
- Budget
- Return on Investment
- Hiring a marketing firm
- Differentiation
- Market analysis
A: Return on Investment
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Return on Investment

Q: Which of the following is an internal risk?
- Low employee moral
- Availability of raw materials
- Outdated machinery
- Conflict with family members
- Increase in facility rent
- Individual hurt onsite
- Cash flow
- Lower competitor prices
A: Low employee moral; Outdated machinery; Individual hurt onsite; Cash flow
If right: That is correct.
If wrong: That’s not correct. The correct answer is: Low employee moral Outdated machinery Individual hurt onsite Cash flow

Q: Which of the following is not a required employer responsibility?
- Withhold applicable taxes
- Verify eligibility to work
- Perform background checks
- Obtain worker’s compensation insurance
- Post applicable safety notices
A: Perform background checks
If right: That is correct.
If wrong: That's not correct. The correct answer is: Perform background checks.

Q: Which of the following legal structure(s) does not require you to file separate taxes for the business?
- Sole Proprietorship
- Corporation
- S Corporation
- Limited Liability Company
- All
A: Sole Proprietorship
If right: That is correct.
If wrong: That's incorrect. The correct answer is: Sole Proprietorship.

Q: Which of the following organizations issues an EIN?
- IRS
- SBA
- State government
- Local municipality
- All
A: IRS
If right: That is correct.
If wrong: That's not correct. The correct answer is: IRS.

Q: Which of the following recordkeeping systems can be accessed from anywhere?
- Paper tool systems
- Computer systems
- Cloud computing systems
A: Cloud computing systems
If right: That is correct.
If wrong: That’s not correct. Cloud computing is the only recordkeeping system that can be accessed from anywhere.

Q: Which of the following should be done before purchasing business software?
- Create an information technology (IT) department
- Get a business credit card
- Evaluate your business needs
- Consult with the Internal Revenue Service (IRS)
A: Evaluate your business needs
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Evaluate your business needs.

Q: Which of the items listed below will not appear on a credit report?
- Unpaid lawsuits
- Employment
- Tax liens
- Credit rating score
- Former alias
A: Employment; Former alias
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Employment Former alias

Q: Which type of risk can generally be controlled?
- Internal risks
- Systematic risks
- External risks
- Market risks
A: Internal risks
If right: That is correct.
If wrong: That is incorrect. The correct answer is: Internal risks.

Q: While reviewing your business plan you identified several risks that could halt, slow, or affect the profit of your business. What should you do with these risks?
- List them by name
- Rank by importance
- Identify the potential cost
A: List them by name; Rank by importance; Identify the potential cost
If right: ALL
If wrong: That is incorrect. All of the options are correct

Q: Workers’ Compensation Insurance is required for businesses with 10 or more employees.
- True
- False
A: False
If right: That is correct.
If wrong: That's incorrect. 'Workers' Compensation Insurance is required for businesses with 10 or more employees' is false.

Q: You do not have to register a fictitious name or DBA as long as you have a federal EIN.
- True
- False
A: False
If right: That is correct.
If wrong: That's not correct. You have to register a fictitious name or DBA, even if you have a federal EIN.

Q: You must report newly hired employees within twenty days to which of the following agency?
- U.S. Department of Labor
- IRS
- Relevant state agency
- SBA.gov
A: U.S. Department of Labor
If right: That is correct.
If wrong: That's incorrect. You must report newly hired employees within twenty days to the relevant state agency.

Q: It is best to stick with a consistent marketing plan from year to year.
- True
- False
A: True
If right: That is correct.
If wrong: That is not correct. The answer is: True.