When a Sole Proprietor Dies

question 52

Multiple Choice

When a sole proprietor dies:

• A)The sole proprietor's heirs have the option of taking over the business.
• B)The business is sold to a larger corporation.
• C)The company continues to function as it always has.
• D)The company always closes down.

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Definitions:

Full Payment

Completion of payment for a product or service in total, settling all owed amounts without remaining balances.

General Journal

A fundamental accounting ledger where all financial transactions are initially recorded, employing a double-entry system.

Sales Tax

A tax imposed by government on sales of goods and services, collected by the seller and passed on to the government.

Cash Customer

A customer who pays for goods or services with cash at the time of purchase rather than buying on credit.