Everything Else Equal, Including Firm Size, Dollar Sales, Type of Product

question 77

Multiple Choice

Everything else equal, including firm size, dollar sales, type of product sold, and so forth, the primary difference between proprietorship and partnership business forms is that _____. 

• A)a partnership has more owners than a proprietorship
• B)the combined personal liability associated with a partnership is significantly less than the combined personal liability associated with a proprietorship
• C)a partnership is generally easier to form than a proprietorship
• D)the annual growth rate of a proprietorship is limited by law, whereas the growth rate of a partnership is always potentially unlimited
• E)many more businesses are formed as partnerships than proprietorships

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Definitions:

Single-Step Income Statement

A simplified income statement that calculates net income or loss by subtracting total expenses from total revenues in one step.

Multiple-Step

An income statement format that segregates operating revenues and expenses from non-operating revenues, expenses, gains, and losses.

Revenues

Revenue that comes from regular business activities, factoring in discounts and allowances for products that are returned.

Expenses

The outflows or using up of assets or incurring of liabilities during a period from delivering goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major operations.