Relative to Sole Proprietorships and Partnerships, What Is a Disadvantage

question 112

Multiple Choice

Relative to sole proprietorships and partnerships, what is a disadvantage of the corporate form of business ownership?

• A) It has unlimited liability.
• B) It requires more paperwork.
• C) It has limited ability to raise financial capital.
• D) It has a limited life.

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Definitions:

Balance Sheet

An accounting document detailing a firm's resources, debts, and equity held by shareholders, capturing its financial status at a particular instant.

Income Statement

a financial statement that summarizes a company's revenues, expenses, and profits over a specific period of time.

Cash Flows

The aggregate volume of funds moving into and out of a corporation, impacting its ability to cover short-term obligations.

Income Statement

A financial statement that shows the company's revenues and expenses over a specific period, indicating how the revenues are transformed into net income or loss.