Which of the Following Is Correct with Respect to Sole

question 49

Multiple Choice

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

• A)The sole proprietorship is a separate legal entity.
• B)A sole proprietorship exists where two or more people carry on business together with a view toward profits.
• C)The sole proprietor has limited liability.
• D)The sole proprietor has unlimited liability.
• E)A sole proprietorship must be incorporated.

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Definitions:

Fixed Expenses

Expenses that remain the same regardless of the level of production or sales activities.

Sales

The total revenue generated from the sale of goods or services by a company during a specific period.

Operating Assets

Assets used by a business in its day-to-day operations to generate income, including equipment, property, and inventory.

Operating Assets

Assets used by a business in its operational activities to generate revenue, excluding investments and non-operating assets.