A Sole Trader Is

question 28

Multiple Choice

A sole trader is:

• A)entitled to business profits but not responsible for business losses.
• B)the owner of a business that is a legal entity separate from its owner.
• C)personally liable for business debts and losses.
• D)jointly and severally liable for business losses.

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Definitions:

Accounts Receivable

Accounts receivable refers to the funds that a company's customers owe it for products or services that have already been provided but for which payment has not yet been received.

Bad Debt Expense

The estimated amount of accounts receivable that will not be collected, recognized as an expense.

Gross Profit

The gap between sales income and the expense of sold products prior to subtracting costs for overhead, employee salaries, taxes, and interest.

Current Assets

Resources anticipated to be exchanged for cash, disposed of, or utilized within a 12-month period or the length of the operating cycle, whichever is greater.