Amelia Has a Lot of Business Knowledge and Is Confident

question 123

Multiple Choice

Amelia has a lot of business knowledge and is confident in her abilities to open a successful store. She recently opened a bakery as a sole proprietor. She is expecting a high level of profits and is looking forward to

• A) the lower corporate tax rate paid by sole proprietorships.
• B) keeping all of the money she earns except for the taxes she is required to pay.
• C) keeping all of the money she earns since she does not have to pay taxes as a sole proprietor.
• D) easily raising additional large sums of money from the capital markets since she is a sole proprietor.

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units.

Equivalent Units

An approach utilized in process costing to translate partially finished units into an equivalent number of completely finished units.

First-in

A principle often related to inventory valuation where the earliest goods purchased or produced are the first ones to be sold or used.

Conversion

The process of changing resources into finished products, or converting prospects into customers.