Which of the Following Is Not an Advantage of Small-Business

question 83

Multiple Choice

Which of the following is not an advantage of small-business ownership?

• A) Lower cost of formation
• B) Flexibility in decision making
• C) Ability to focus on specific groups of customers
• D) Low failure rate
• E) Ability to gain a solid reputation

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Definitions:

Equity Method

An accounting technique used by companies to assess the profits earned by their investments in other companies, reflecting the profit share in their income statements.

Land Transfer

The process of transferring ownership of land from one party to another through sale, gift, or inheritance.

Consolidating Entries

Journal entries made in preparation of consolidated financial statements to remove effects of intercompany transactions.

Straight-Line Depreciation

A method of distributing the cost of an asset evenly across its useful life, where the asset's value decreases by a fixed amount each year.