Which of the Following Statements Is CORRECT

question 36

Multiple Choice

Which of the following statements is CORRECT?

• A) One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.
• B) Sole proprietorships are subject to more regulations than corporations.
• C) In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
• D) Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
• E) Corporations of all types are subject to the corporate income tax.

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Definitions:

Standard Cost System

A cost accounting system that uses predetermined costs for estimating the actual cost of production.

Actual Results

The real values or outcomes achieved after the completion of a particular period, project, or activity, typically compared against previously set targets or budgets.

Variable Overhead Efficiency Variance

This is the difference between the actual hours taken to produce something and the standard hours expected, multiplied by the variable overhead rate per hour.

Supplies Cost

The cost associated with materials and items that are consumed or used in the process of producing goods or providing services.