What Is the Primary Difference Between a Sole Proprietorship and a Partnership

question 12

Multiple Choice

What is the primary difference between a sole proprietorship and a partnership?

• A)Proprietorships have unlimited liability while partnerships have limited liability.
• B)Partnerships can issue stocks and bonds while proprietorships cannot.
• C)Partnerships have more owners than do proprietorships.
• D)There is no real difference between the two types of firms.

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered in depreciation calculations.

Normal Plant Capacity

The expected or planned level of operation for a manufacturing plant, considering normal working conditions and time periods.

Differential Analysis

The process of comparing the costs and benefits of alternative decisions, focusing on the differences between the options.

Fixed Costs

Expenses that do not change in the short term, regardless of the level of production or sales activities.