Which of the Following Is Not a Disadvantage of Forming

question 38

Multiple Choice

Which of the following is not a disadvantage of forming a business as a partnership?

• A) Unlimited liability for the owners.
• B) Limited life of the organization.
• C) Difficulty of transferring ownership.
• D) Difficulty in raising capital.
• E) Business is taxed like an individual.

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Definitions:

Patents

Legal rights granted to inventors that prevent others from making, using, or selling an invention for a certain period of time.

Marketable Securities

Financial instruments that can be easily converted into cash because they have high liquidity and short maturities.

Financial Leverage

Employing the use of debt to boost the prospective profits of an investment, which in turn escalates the risk of experiencing a loss.

Debt-To-Equity Ratio

The ratio portraying the financial interplay between shareholder equity and debt in the capital structure for assets.