Two Key Limitations of the Proprietorship Form of Business Involve

question 13

True/False

Two key limitations of the proprietorship form of business involve potential difficulty in raising needed capital and the presence of unlimited personal liability for business debts.

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Definitions:

Fixed Costs

Costs that do not fluctuate with the level of production or sales, such as rent, insurance, and salaries.

Sales Dollars

The total monetary value of sales transactions completed within a specific period.

High-Low Method

A technique used in managerial accounting to estimate fixed and variable costs associated with production.

Break-Even Point

The financial calculation where total revenues equal total expenses, resulting in no profit or loss.