Which of the Following Statements Is CORRECT

question 13

Multiple Choice

Which of the following statements is CORRECT?

• A) 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.
• B) Most businesses (by number and total dollar sales)are organized as proprietorships or partnerships because it is easier to set up and operate 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.
• C) Due to legal considerations related to ownership transfers and limited liability,which affect the ability to attract capital,most business (measured by dollar sales)is conducted by corporations in spite of large corporations' less favorable tax treatment.
• D) Large corporations are taxed more favorably than proprietorships.
• E) Corporate stockholders are exposed to unlimited liability.

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Definitions:

Interest Rate

The percent of principal charged by the lender for the use of its money, or the amount earned on deposited funds.

Loan Liability

A financial obligation representing money borrowed that must be repaid, with interest, to the lender.

Exchange Rates

The speed at which one country's currency can be traded for another's, impacting global trade and investment activities.

Calendar Year End

Indicates the end of the fiscal year for a business or organization that aligns with the end of the calendar year, December 31.