Which One of the Following Statements Is Correct with Respect

question 170

Multiple Choice

Which one of the following statements is correct with respect to sole proprietorships?

• A) A sole proprietorship is a separate legal entity with one shareholder.
• B) A sole proprietorship involves limited liability.
• C) The sole proprietor is a society under the Societies Act.
• D) A sole proprietorship involves unlimited liability for the proprietor.
• E) The sole proprietor is restricted to service type businesses.

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Definitions:

Write-Off

A write-off involves removing an asset from the financial statements because it is no longer collectible or has no value.

Bank Reconciliation

Bank reconciliation involves the process of matching and comparing the account balance in an entity's financial records to the corresponding information on a bank statement, to ensure accuracy and consistency.

NSF Check

A check that cannot be processed because the writer's account does not have sufficient funds, known as a Non-Sufficient Funds check.

Bank Service Charges

Fees charged by banks for various services provided to customers, such as account maintenance or transaction processing.