Which of the Following Statements Is NOT True Regarding the Advantages

question 2

Multiple Choice

Which of the following statements is NOT true regarding the advantages and disadvantages of a sole proprietorship?

• A) A sole proprietorship can be created without formal agreements or state filings.
• B) The proprietor reports income from the business on a personal tax return.
• C) The proprietor alone bears liability for the losses.
• D) It is usually easy for sole proprietorships to raise capital.

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Definitions:

Comparative Balance Sheet

A financial statement that presents the financial position of a company at different points in time, side-by-side, to enable comparison.

Accounts Receivable

Debts owed by clients to a business for provided services or products yet to be paid.

Statement of Cash Flows

A financial document detailing the inflow and outflow of cash within a company, showing how changes in the balance sheet and income affect cash and cash equivalents.

Parentheses

Symbols used in writing () to include additional information or clarify something within a sentence.