Blake, Madison and Sean Started Selling Computer Software on College

question 93

Multiple Choice

Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1,500toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company can best be described as:

• A) a proprietorship.
• B) a partnership.
• C) a trade alliance.
• D) a corporation.
• E) none of these.

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Definitions:

Average Total Assets

This is a measure used to evaluate a company's asset efficiency by calculating the average total assets over a specific period.

Straight-line Method

An approach to depreciation that distributes the total cost of an asset evenly across its expected lifespan.

Salvage Value

The predicted leftover value of an asset following the end of its usable period.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.