One of the Major Disadvantages of a Sole Proprietorship Is

question 349

Multiple Choice

One of the major disadvantages of a sole proprietorship is the:

• A)Possibility of disagreements between owners.
• B)Unlimited liability the owner has for the debts of the firm.
• C)Fact that any income earned by this type of business is taxed twice.
• D)High cost of starting or ending the company.

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Definitions:

Break Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Selling Price

The amount of money for which a product or service is sold to customers.

Raw Materials

The basic materials from which products are made, typically unprocessed or minimally processed before being used in manufacturing processes.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs.