Which of the Following Is True About the Choice of Business

question 35

Multiple Choice

Which of the following is true about the choice of business entity for an entrepreneur?

• A) The choice will be determined by the amount of capital invested.
• B) The Internal Revenue Service will determine the type of entity based on all the facts and circumstances.
• C) The choice will be determined by whether the primary business is services or goods.
• D) The choice will take into account many factors,with wide latitude in finding an entity that has all the characteristics desired.
• E) The choice will take into account many factors,but the entrepreneur usually will have to accept substantial tradeoffs,as each different entity generally has a set of characteristics that must be accepted in total,the desirable and the undesirable.

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Definitions:

Time-Driven Activity-Based Costing

A costing method that assigns indirect costs to products and services based on the time required to perform specific activities for those products or services.

Tech Support Department

A division within a company responsible for assisting customers with technical problems or inquiries about products or services.

Customer Cost Analysis

The process of identifying all the costs associated with acquiring and maintaining customers to assess profitability.

Time-Driven Activity-Based Costing

A costing method that calculates costs based on the actual time activities take and the cost of supplying resources to these activities.