Which One of the Following Statements Is Correct with Respect

question 62

Multiple Choice

Which one of the following statements is correct with respect to sole proprietorships?

• A) The sole proprietor has limited liability.
• B) The sole proprietor need not adhere to any licensing and government regulations.
• C) The sole proprietor must consult with the other owners before making any major decisions regarding the business.
• D) The sole proprietor has the same extent of liability as a shareholder.
• E) The sole proprietor is responsible for the torts committed by an employee that take place during the course of business.

---

Definitions:

Compounded Annually

Describes the method by which the interest earned on an investment is calculated and added to the principal balance once per year, leading to an increase in the amount of future interest.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Semiannual Interest

Interest that is paid or calculated twice a year, often used in bond payments.

Compounded Annually

This term describes interest on an investment that is calculated once a year, where the interest added also earns interest in subsequent years.