The Most Significant Limitation on Use of a Sole Proprietorship

question 18

Multiple Choice

The most significant limitation on use of a sole proprietorship is that

• A) the sole proprietor alone must do all the work in the sole proprietorship business.
• B) it is simple to terminate.
• C) the sole proprietor has unlimited personal liability for all obligations of the sole proprietorship business.
• D) the sole proprietor must obtain a business licence.
• E) the sole proprietor must register a business name.

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Definitions:

Total Asset Turnover Ratio

A financial metric indicating how effectively a company uses its assets to generate sales revenue, calculated by dividing sales by average total assets.

Fixed Assets

Long-term tangible property, plant, and equipment that a company owns and uses in its operations to generate income.

Chlorine Atom

An elementary particle of chlorine, which is a chemical element with the symbol Cl and atomic number 17, known for its high reactivity and use as a disinfectant.

Ozone Molecules

Triatomic molecules consisting of three oxygen atoms, crucial for absorbing the majority of the sun's harmful ultraviolet radiation in the Earth's atmosphere.