Which of the Following Is True of a Sole Proprietorship

question 12

Multiple Choice

Which of the following is true of a sole proprietorship business?

• A) A sole proprietor has limited flexibility in managing the business.
• B) A sole proprietor has unlimited liability and high financial risk.
• C) A sole proprietorship that is operated under the proprietor's name must be registered.
• D) A sole proprietorship is a complex business to organize.

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or delivery of services.

Departmental Overhead Rates

Overhead rates calculated for specific departments within a company, allowing for more accurate assignment of overhead costs to products.

Direct Labor Hours

The total hours worked by employees directly involved in the production process.

Machine Hours

A measure of the total time that a machine is operated, used in calculating manufacturing costs and allocating expenses.