One Disadvantage of a Sole Proprietorship as a Form of Business

question 96

Multiple Choice

One disadvantage of a sole proprietorship as a form of business organization is that

• A)sole proprietorships cannot lower the transaction costs associated with contracting with resource owners
• B)sole proprietorships are less efficient than corporations, because they are less specialized in production
• C)owners of sole proprietorships can lose all their personal assets if the business is sued or fails
• D)owners of sole proprietorships generally find it difficult to negotiate separation agreements with the other partners in the firm
• E)owners of sole proprietorships generally have very little control over how they operate their businesses

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Definitions:

Activity Variance

The difference between the planned budget allocation for a particular activity and the actual expenditure incurred for that activity.

Meals

Meals include the food and beverages consumed predominantly for nutrition or sustenance, often categorized based on the time of day or occasion.

Activity Variances

The difference between the budgeted and actual costs associated with a specific activity, indicating whether the activity was more or less expensive than planned.

Customers Served

The number of customers or clients who have received products or services from a company within a specific period.