An Advantage of Proprietorship Is That It

question 47

Multiple Choice

An advantage of proprietorship is that it:

• A) proves easy in obtaining credit.
• B) offers unique tax advantages.
• C) ensures that the business has an unlimited life.
• D)provides access to unlimited capital.

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Definitions:

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions to shareholders, reinvested in the business or kept as reserve.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, thus preparing the books for the next period.

Adjusted Trial Balance

An enumeration of every account and its balance following adjustment entries, employed in the development of financial reports.

Retained Earnings

The amount of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.