Sole Proprietors Can Look Only to Their Own Resources to Finance

question 209

Multiple Choice

Sole proprietors can look only to their own resources to finance the business operation. They cannot sell shares and are restricted to their own ________ standing when borrowing money to finance the business.

• A) asset
• B) debt
• C) profit
• D) credit
• E) retained earnings

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Definitions:

Journal Entries

Written records of the financial transactions and events of a business, used to document and track the financial impact on its accounts.

Perpetual Inventory System

A financial recording technique that immediately documents inventory sales or acquisitions through computerized point-of-sale systems and software for managing enterprise assets.

Administrative Expenses

The costs related to the general administration of a business, such as salaries of senior executives, accounting, human resources, and information technology.

President's Salaries

Compensation or wage paid to the president of a company, often reflecting their role's responsibility and level of professional experience.