Which of the Following Is a Disadvantage of Partnerships Over

question 8

Multiple Choice

Which of the following is a disadvantage of partnerships over sole proprietorships?

• A)Unlike sole proprietorships,partnerships do not face any regulatory controls that affect their activities.
• B)In partnerships,all owners have unlimited liability,whereas in sole proprietorships they have limited liability.
• C)In partnerships,profits have to be shared,whereas in sole proprietorships all profits belong exclusively to the owner.
• D)In sole proprietorships,the owners have access to more funds than in partnerships.
• E)Unlike a sole proprietorship,a partnership is terminated when a partner dies or withdraws.

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Definitions:

Income Allocated

Allocation of income refers to the distribution of earnings among various accounts or entities, often for tax, investment, or accounting purposes.

Liquidation

The process of dissolving a company by selling off its assets to pay off liabilities; any remaining assets are then distributed to shareholders.