All of the Following Are Advantages of a Sole Proprietorship

question 70

Multiple Choice

All of the following are advantages of a sole proprietorship except ________.

• A) creating one is easy and inexpensive
• B) unlimited liability
• C) it is not subject to double taxation
• D) the owner maintains complete control of the business
• E) business losses can be deducted against the sole proprietor's other sources of income

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Definitions:

Normal Rates

The standard or average prices, fees, or charges for goods, services, or financial transactions within a specific sector or economy.

Total Costs

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Total Revenue

The overall income generated by a firm from its sales activities before any costs or expenses are subtracted.

Normal Return

The minimum profit necessary for a company to remain in business, often equated to covering opportunity costs.