A Local Retail Shop Has Been Operating as a Sole

question 58

Multiple Choice

A local retail shop has been operating as a sole proprietorship.The business is growing and now the owner wants to incorporate.Which of the following is not a reason for this owner to incorporate?

• A)Ability to raise capital for expansion
• B)Desire to limit the owner's personal liability
• C)The prestige of operating as a corporation
• D)The ease in transferring shares of the corporation's stock

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Definitions:

Compounded Monthly

A method of calculating interest where the accrued interest is added to the principal sum each month, so that each subsequent interest calculation is made on a slightly higher amount.

Compounded Annually

The practice of calculating and adding interest to the initial amount of money once every year, increasing the future accruals of interest.

Amortized

Amortized refers to gradually reducing the principle amount owed on a debt over time through a fixed repayment schedule.

Compounded Monthly

Interest on an investment or loan calculated each month and added to the principal, affecting the amount of future interest.