Which of the Following Statements Is CORRECT

question 28

Multiple Choice

Which of the following statements is CORRECT?

• A) It is generally more expensive to form a proprietorship than a corporation because, with a proprietorship, extensive legal documents are required.
• B) Corporations face fewer regulations than sole proprietorships.
• C) One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner level.
• D) One advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.
• E) If a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

---

Definitions:

Psychologist

A professional trained in the science of behavior and mental processes, often providing services in therapy, research, or education.

Heredity

The passing of traits from parents to their offspring through genes.

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates.

Behavior

The actions or reactions of a person or animal in response to external or internal stimuli.