If the Death of an Owner Causes the Firm to Dissolve

question 198

Multiple Choice

If the death of an owner causes the firm to dissolve, the firm must have been

• A) a partnership only.
• B) a proprietorship only.
• C) a corporation only.
• D) either a proprietorship or a partnership.

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Definitions:

Explicit Costs

Direct, out-of-pocket payments for expenses incurred in conducting business, such as wages and materials.

Nonexpenditure Costs

Costs not directly involving monetary payment but may include time, effort, or loss of opportunity.

Economic Cost

A payment that must be made to obtain and retain the services of a resource; the income a firm must provide to a resource supplier to attract the resource away from an alternative use; equal to the quantity of other products that cannot be produced when resources are instead used to make a particular product.

Contractual Obligation

A legal requirement that a party must adhere to as stipulated in a contract, enforceable by law.