Which of the Following Statements Is Incorrect Regarding Sole Proprietorships

question 75

Multiple Choice

Which of the following statements is incorrect regarding sole proprietorships?

• A) There is one owner.
• B) Sole proprietor is in full control.
• C) Business ends at the owner's death or loss of interest in the business.
• D) Liquidity of the investment is high.
• E) Money must be raised by the sole proprietor.

Understand the effects of buying and selling portions of investments on the investment account balance.

Understand and apply the equity method for accounting for investments.

Prepare journal entries related to equity method investments including initial recognition, recognition of investee's net income or loss, and dividends received.

Calculate and defer gross profit on inter-entity inventory sales and recognize it appropriately in subsequent periods.

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Definitions:

Cognitive Component

The aspect of attitudes or beliefs that involves knowledge, thoughts, and beliefs about objects, people, or situations.

Negative Attitude

refers to a pessimistic or adverse viewpoint towards a subject, resulting from a person's thoughts, beliefs, and feelings.

Cheating

The act of being dishonest or breaking rules to gain an unfair advantage, especially in a competitive situation.

Passionate Love

An intense emotional state characterized by romantic attraction, physical desire, and an overwhelming fascination with another person.