Answer and Explanation: It is correct that b) the owner of a sole proprietorship is personally responsible for all the company’s debts.
Which of the following describes a sole proprietorship?
A sole proprietorship is a business that can be owned and controlled by an individual, a company or a limited liability partnership. There are no partners in the business. The legal status of a sole proprietorship can be defined as follows: It is not a separate legal entity from the business owner.
Which of the following business types has unlimited liability and the potential for conflict among owners?
Because the sole proprietorship has unlimited liability, all profits and losses belong to the owner. As long as the profits do not exceed a certain amount, there is a tax advantage because the income is taxed at the personal income level.
Which one of the following business types is best for raising large amounts of capital?
corporation
The correct answer is B.
A corporation is owned by shareholders who have limited liability, and it is best suited to raising large amounts of capital. The owners of the corporation provide capital for the business in exchange for shares. Corporations raise capital by issuing new shares of stock.
Which of the following statements most accurately describes the primary objective of financial management?
The primary financial objective of financial management is the maximisation of shareholder wealth. The following are examples of a variety of financial objectives of an organisation: Shareholder Wealth Maximisation The primary financial objective of financial management is the maximisation of shareholder wealth.
What are the 5 main characteristics of a sole proprietorship?
The five characteristics of sole proprietorship are as follows:
- Sole owner of the business.
- Unlimited liability.
- No legal entity.
- Sole decision maker.
- Can wrap up the business anytime.
What are four 4 characteristics of sole proprietorship?
The proprietor alone takes all the decisions pertaining to the business. He is not required to consult anybody. Ownership and management are vested in the same person. Some persons may be employed to help the owner but ultimate control lies with him.
Which of the following is not an advantage of a sole proprietorship?
Answer and Explanation: Unlimited liability (option a) is not an advantage of a proprietorship. Unlimited liability is an undesirable feature for a proprietorship because it means that the owner of the enterprise is personally responsible for all debts.
Which of the following is a disadvantage of sole proprietor ownership?
Unlimited liability
Among one of the biggest disadvantages of a sole proprietorship is unlimited liability. This liability not only spans the business but the business owner’s personal assets. Debt collectors can access your savings, property, cars, and more to see a debt repaid.
What is a disadvantage of operating a sole proprietorship?
Disadvantages of a sole proprietorship
Liability: An important fact with this business structure is that the owner is left liable for all obligations of the business — including debt and lawsuits. There is no separation between the assets of the owner and the assets of the business.
Which of the following is an advantage of a sole proprietorship?
4 advantages of a sole proprietorship
Sole proprietorships are easy to establish and get started. The owner retains complete control of the business. There are no corporate income tax payments. They are less expensive than other business types.
Which are examples of sole proprietorships check all that apply?
Examples of sole proprietors include small businesses such as, a local grocery store, a local clothes store, an artist, freelance writer, IT consultant, freelance graphic designer, etc.
Which of the following is a key difference between a corporation and a sole proprietorship?
Which of the following is a key difference between a corporation and a sole proprietorship? In a sole proprietorship, the owner has unlimited personal liability for the business’s financial obligations. In a corporation, the investors’ liability is limited to the amount of their investment.
Which one of the following statements related to an income statement is correct quizlet?
Which one of the following statements related to an income statement is correct? accrual accounting is used.
Which one of the following terms is defined as the management of a firm’s long-term investments?
The answer to “which one of the following terms is defined as the management of a firm’s long-term investments?” Here clearly shows you why capital budgeting is the right answer to the questions. Capital budgeting itself is the permanent assets of the long-term investments of the management.
Which one of the following is the best description of the goal of a financial manager in a corporation where shares are publicly traded?
The main goal of the financial manager is to maximize the value of the firm to its owners. The value of a publicly owned corporation is measured by the share price of its stock.
What are 3 features of a sole proprietorship?
Some of the key features of a sole proprietorship include:
- simplicity in its business structure;
- sole ownership;
- unlimited liability for the sole proprietor;
- the sole proprietor not having to share profits; and.
- minimal formalities.
What are the functions of sole proprietorship?
Sole traders make all operational decisions and are solely responsible for raising business finance. They can invest their own capital into the business, or may be able to access business loans and/or overdrafts. Unlike limited companies or partnerships, it is not necessary to share decision making or the profits.
What are the types of sole proprietorship?
Type of Sole Proprietorship
- Trading Business. Of course, many already know about this first type.
- Small Industry. This field includes a complex type of individual economic business.
- Service Business. This field also includes many enthusiasts, because it can adapt to special abilities.
- Agriculture.
What is one major disadvantage to organizing a business as a sole proprietorship?
The biggest disadvantage of a sole proprietorship is that there is no separation between business assets and personal assets. This means that if anyone sues the business for any reason, they can take away the business owner’s cash, car, or even their home.
Why sole proprietorship is the best form of business essay?
Its advantages are ease of organization and low organizational costs. It is the most convenient structure for a small business in terms of taxation and less risky than a partnership.