Which of the Following Is an Advantage of a Sole

question 15

Multiple Choice

Which of the following is an advantage of a sole proprietorship?

• A) The sole proprietorship continues upon the death of the owner.
• B) The sole proprietor is entitled to all of the profits of the firm.
• C) The sole proprietor is personally liable for all debts and obligations of the firm.
• D) The sole proprietor is dependent on loans made by lending institutions and others for capital expansion.

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Definitions:

New Loans

Recently issued debts or obligations by a lender to a borrower, typically involving a certain amount of money to be paid back with interest.

Balance Sheets

Financial statements that summarize a company's assets, liabilities, and shareholders' equity at a specific point in time.

Asset

An item of value owned by an individual or corporation, expected to provide future benefit or revenue.

Reserve Requirement

A regulation set by central banks requiring commercial banks to hold a certain amount of their deposits as reserves, either as cash in their vaults or as deposits with the central bank, to ensure liquidity.