Which One of the Following Statements Is Correct

question 20

Multiple Choice

Which one of the following statements is correct?

• A)All types of business formations have limited lives.
• B)Partnerships are the most complicated type of business to form.
• C)Sole proprietorships and partnerships are taxed in a similar fashion.
• D)General partnerships and corporations provide limited liability for all owners.
• E)Both partnerships and corporations incur double taxation.

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Definitions:

Residual Income

The income that remains after deducting all required costs of capital and operating expenses, indicating the net income generated beyond the minimum rate of return.

Division Performance

An evaluation of the effectiveness and productivity of a specific division or segment within a company, often measured against pre-set targets or industry standards.

Return On Investment

A measure of the profitability of an investment relative to its costs, commonly expressed as a percentage.

Operating Assets

Assets used by a company to generate revenue, typically including property, plant, and equipment, but excluding investments and inventories.