A Sole Proprietorship

question 55

Multiple Choice

A sole proprietorship:

• A) consists of a business owned and operated by one individual.
• B) is a business form that protects the personal assets of the owner.
• C) is a business form that requires several formalities.
• D) is a business form that pays taxes as a business.
• E) All of the above

---

Definitions:

Paid-In Capital

Funds that are received by a company from investors in exchange for stock, representing the capital provided by shareholders as a part of the equity of the company.

Cash Dividends

Payments made out of a corporation's earnings to its shareholders in the form of cash.

Treasury Stock

Refers to shares that were previously issued and outstanding but have been bought back by the issuing company, reducing the amount of outstanding stock on the open market.

Stock Split

An action by a company to increase the number of its outstanding shares by issuing more shares to current shareholders, often to make the stock more affordable.