A Defining Difference in What Makes a Firm a Sole

question 6

Multiple Choice

A defining difference in what makes a firm a sole proprietorship, partnerships, or a corporation is the:

• A) size of each type of business.
• B) number of each type of business.
• C) nature of ownership and accountability for each type of business.
• D) profitability of each type of business.

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Definitions:

Current Liabilities

Obligations or debts that a company is expected to pay off within a year, such as accounts payable or short-term loans.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made, used for preparing financial statements.

Net Loss

The amount by which total expenses exceed total revenues in a given period, indicating a negative financial performance.

Notes Receivable

An asset on the balance sheet representing the right to receive payments from a debtor under the terms of a promissory note.