How Does a Partnership Differ from a Sole Proprietorship

question 31

Multiple Choice

How does a partnership differ from a sole proprietorship?

• A) double taxed on income
• B) funds are limited
• C) more difficult to dissolve
• D) all of the above

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Definitions:

Retained Earnings

Retained earnings represent the cumulative amount of net income a company retains for reinvestment in its operations rather than paying it out as dividends.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest.

Gross Margin Percentage

A financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage.

Gross Margin

The difference between revenue and the cost of goods sold, which indicates the profitability before administrative, sales, and other expenses.