A Disadvantage of a Sole Proprietorship Is

question 42

Multiple Choice

A disadvantage of a sole proprietorship is

• A) the complexity of the organization.
• B) the cost of starting the business.
• C) the lack of limits on personal liability.
• D) the difficulty of distribution.

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Definitions:

Pooling-of-interests Method

A merger accounting method where the assets and liabilities of merging companies are combined using their book values.

Acquisition Method

An accounting approach used to consolidate the financial statements of two companies when one company acquires control over the other.

Purchase Method

An accounting method used in mergers and acquisitions where the assets and liabilities of the acquired company are added to the acquirer's balance sheet at their fair market values.

Business Combination

A transaction or event in which an acquirer obtains control of one or more businesses, often involving mergers, acquisitions, or consolidations.