Business Services Business Services 2 — Questions and Answers
Question 1: A company wants to outsource its IT helpdesk. Which contract type best protects service quality?
- Fixed-price contract
- Service Level Agreement (SLA) (Correct answer)
- Time-and-materials contract
- Letter of intent
Correct answer: Service Level Agreement (SLA)
An SLA defines measurable service standards, uptime guarantees, and penalties, making it the best tool for protecting IT helpdesk quality.
Question 2: Which of the following best describes a sole proprietorship in the US?
- A business owned by shareholders with limited liability
- An unincorporated business owned and operated by one person (Correct answer)
- A partnership between two or more individuals
- A nonprofit organization recognized by the IRS
Correct answer: An unincorporated business owned and operated by one person
A sole proprietorship is the simplest business structure where one individual owns and operates the business with no legal separation from the entity.
Question 3: What does accounts receivable (AR) represent on a company's balance sheet?
- Money owed by the company to suppliers
- Cash held in the company's bank accounts
- Money owed to the company by its customers (Correct answer)
- Long-term debt obligations
Correct answer: Money owed to the company by its customers
Accounts receivable represents money customers owe the company for goods or services already delivered but not yet paid for.
Question 4: A business hires a worker who sets their own hours, uses their own tools, and works for multiple clients. How should this worker typically be classified?
- Full-time employee
- Part-time employee
- Independent contractor (Correct answer)
- Intern
Correct answer: Independent contractor
Control over schedule, use of personal tools, and working for multiple clients are key indicators that someone is an independent contractor rather than an employee.
Question 5: Which document formally outlines the terms of a business partnership before the partnership agreement is signed?
- Memorandum of Understanding (MOU) (Correct answer)
- Purchase order
- Invoice
- W-9 form
Correct answer: Memorandum of Understanding (MOU)
An MOU is a non-binding document that records the intentions of two parties before a formal legal agreement is finalized.
Question 6: What is the primary purpose of a business continuity plan (BCP)?
- To increase quarterly revenue targets
- To ensure operations continue during and after a disruption (Correct answer)
- To outline employee benefits and compensation
- To manage supplier contracts
Correct answer: To ensure operations continue during and after a disruption
A BCP ensures that critical business functions can continue or quickly resume during disasters, cyberattacks, or other disruptions.
Question 7: Which type of business insurance covers claims made by third parties for bodily injury or property damage caused by the business?
- Workers' compensation insurance
- General liability insurance (Correct answer)
- Business interruption insurance
- Professional liability insurance
Correct answer: General liability insurance
General liability insurance protects businesses from third-party claims involving bodily injury, property damage, and advertising injuries.
Business Services Business Services 2
A company wants to outsource its IT helpdesk.
Which contract type best protects service quality?