Although a Proprietorship Is Not a Separate Legal Entity, a Partnership

question 114

True/False

Although a proprietorship is not a separate legal entity, a partnership is.

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Definitions:

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.

Liabilities

Financial obligations a company owes to external parties, including loans, accounts payable, and mortgages.

Total Assets

The sum of all current and non-current assets owned by a company, reflecting the company’s total resources.

Trial Balance

A bookkeeping report that lists the balances in each of an organization's general ledger accounts, used to verify that total debits equal total credits in the accounting ledgers.