Which of the Following Is a Disadvantage of Sole Proprietorships

question 98

Multiple Choice

Which of the following is a disadvantage of sole proprietorships?

• A)It is difficult to create a sole proprietorship.
• B)There is a lack of flexibility.
• C)They have limited liability for business debts.
• D)They have to pay ordinary income tax on their business profits.
• E)Autonomy comes with limited ownership of the business's finances.

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Definitions:

Management Exception

A management principle where only significant deviations from set standards are brought to the attention of management to optimize decision-making efficiency.

Actual Performance

The real, measurable outcomes of an individual's or organization's work, often compared against expected or intended performance.

Below Standard

A performance or quality level that does not meet the set baseline or expected criteria, indicating the need for improvement or corrective action.

Input Standards

Measure work efforts that go into a performance task.