Which of the Following Is True About a Proprietorship

question 35

Multiple Choice

Which of the following is true about a proprietorship?

• A)The capital account is used to record only the investments of the owner.
• B)The drawing account records distribution of assets to the proprietor.
• C)A proprietorship is a separate legal entity from the owner.
• D)A proprietorship is subject to income tax.

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Definitions:

Partially Executed

Refers to a contract or agreement where some, but not all, of the required actions have been completed by the parties involved.

Illegal Contract

An agreement between parties that is prohibited by law or violates legal statutes, making it unenforceable.

Breach

To violate a law, by an act or an omission, or to break a legal obligation that one owes to another person or to society.

Illegal Contract

An agreement that is either unlawful in nature or made with the purpose of undertaking an illegal act, and thus, is not enforceable by law.