Which Characteristic of a Sole Proprietorship Can Be Considered Both

question 35

Multiple Choice

Which characteristic of a sole proprietorship can be considered both an advantage and a disadvantage?

• A) Taxation
• B) Fund sources
• C) Liability
• D) Continuity
• E) Secrecy

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Definitions:

Capital Balances

The amount of money contributed to a company by its owners or shareholders plus retained earnings.

Liquidation

The process of winding up a company's operations, selling off its assets to pay creditors and distributing any remaining assets to its shareholders.

Partnership

A lawfully organized business effort where partners distribute management tasks and the earnings.

Winding-Up Process

The formal procedure of liquidating a company's assets, settling liabilities, and distributing any remaining assets to shareholders or creditors.