Which of the Following Statements Is CORRECT

question 36

Multiple Choice

Which of the following statements is CORRECT?

• A) One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.
• B) Sole proprietorships are subject to more regulations than corporations.
• C) In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
• D) Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
• E) Corporations of all types are subject to the corporate income tax.

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Definitions:

Statement Of Comprehensive Income

A financial statement that presents a company's total income, including both net income and other income items that are not included in the net income.

Gross Profit Ratio

A financial metric that compares gross profit to net sales, revealing the efficiency of a company in managing its labor and supplies in production.

Accounts Receivable

Customer-incurred debts to a business for goods or services for which payment is outstanding.

Inventory Turnover

A ratio showing how often a company has sold and replaced its inventory during a certain period, indicating the efficiency of inventory management.