The Form of Business Ownership That Most Effectively Limits the Risk

question 8

Multiple Choice

The form of business ownership that most effectively limits the risk of ownership is

• A)sole proprietorship.
• B)general partnership.
• C)corporation.
• D)none of the above,all forms of business ownership are equally risky.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both fixed and variable manufacturing overhead - in the cost of a product.

Nonmanufacturing Costs

Expenses that are not directly tied to the production of goods, including selling, general, and administrative expenses.

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to products, based on a planned level of activity or volume of production.

Manufacturing Overhead Cost

Indirect costs related to the production process, such as factory utilities, that cannot be traced directly to specific products.