Which of the Following Statements Is CORRECT

question 39

Multiple Choice

Which of the following statements is CORRECT?

• A)Most businesses (by number and total dollar sales) are organized as proprietorships or partnerships because it is easier to set up and operate in one of these forms rather than as a corporation.However, if the business gets very large, it becomes advantageous to convert to a corporation, primarily because corporations have important tax advantages over proprietorships and partnerships.
• B)Due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of U.S.businesses (in terms of number of businesses) are organized as corporations.
• C)Due to legal considerations related to ownership transfers and limited liability, most business (measured by dollar sales) is conducted by corporations in spite of large corporations' often less favorable tax treatment.
• D)Large corporations are taxed more favorably than sole proprietorships.
• E)Corporate stockholders are exposed to unlimited liability.

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Definitions:

Worse Off

A situation in which an individual or group is in a less favorable or more disadvantageous position than before.

International Trade

entails the exchange of goods and services across international borders or territories, influenced by comparative advantages, exchange rates, and global economic policies.

Firms

Business entities or organizations that engage in commercial, industrial, or professional activities.

Budget Surplus

When federal tax receipts are greater than federal government spending.