The Proprietorship Form of Business Organization

question 27

Multiple Choice

The proprietorship form of business organization

• A) must have at least three owners in most states.
• B) requires that the owner be personally liable for all debts of the business.
• C) combines the records of the business with the personal records of the owner.
• D) is characterized by a legal distinction between the business as an economic unit and the owner.

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Definitions:

High-Low Method

A technique in cost accounting used to estimate fixed and variable costs based on the highest and lowest levels of activity.

Utilities Cost

The expenses incurred for essential services such as electricity, water, and gas used by a business.

Cost Formula

An algorithm or equation used to predict the costs associated with producing a certain number of units.

Mixed Costs

Costs that have both fixed and variable components and change in total with the level of activity but not proportionately.