One of the Disadvantages of Operating a Business as a Sole

question 16

Multiple Choice

One of the disadvantages of operating a business as a sole trader is:

• A)you have limited liability for the debts of the business.
• B)your creditors are not legally required to help you pay your business debts.
• C)you have unlimited liability for the debts of the business.
• D)banks are prohibited under state and federal legislation from lending the sole traders more than 50% of the value of the business.

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Definitions:

Transportation Cost

Expenses incurred in moving goods from one location to another, including freight charges, fuel costs, and labor.

Hidden Costs

Expenses that are not obvious at the initial stage but emerge during the process or lifecycle of a project, product, or service.

Cash Flow

The total amount of money being transferred into and out of a business, affecting its liquidity, operations, and financial health.

Product Flow

The movement of goods from the place of production to the point of sale and finally to the end-consumer, encompassing the entire supply chain process.