Which of the Following Statements About Organizational Forms of a Business

question 83

Multiple Choice

Which of the following statements about organizational forms of a business is not correct?

• A)In a sole proprietorship form of business or in a partnership form,the owner(s)are personally responsible for the debts of the business.
• B)The partnership agreement states how profits are to be shared between partners and what happens when a new partner is to be admitted or an existing partner is retiring.
• C)A corporation is a separate entity from both a legal and accounting perspective.
• D)The owners of a corporation are legally responsible for the corporation's debts and taxes.

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Definitions:

Finance Lease

A type of lease in which the lessee effectively takes on all the risks and rewards of ownership, though legally the asset remains owned by the lessor.

Lessors

Entities that lease an asset to a lessee, typically retaining ownership of the asset for the duration of the lease agreement.

Market Rent

The average rent that similar properties in the same area are fetching on the open market; used as a benchmark in lease agreements.

Fair Value

The proceeds from selling an asset or the outlay to relocate a liability in a planned interaction among market stakeholders on the benchmark date.