Which of the Following Statements Is CORRECT

question 30

Multiple Choice

Which of the following statements is CORRECT?

• A) Most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation.However, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships.
• B) Due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of U.S.businesses (in terms of number of businesses) are organized as corporations.
• C) Most business (measured by dollar sales) is conducted by corporations in spite of large corporations' often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.
• D) Large corporations are taxed more favorably than sole proprietorships.
• E) Corporate stockholders are exposed to unlimited liability.

Understand the accounting treatment of expenses and revenue recognition for a merchandising business.

Understand the closure of accounts and calculation of financial ratios in accounting.

Understand the concept of inventory shrinkage and its recording in accounting.

Calculate and interpret asset turnover ratio.

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Definitions:

Bruges

A city in Belgium known for its well-preserved medieval architecture, canals, cobblestone streets, and as a center of commerce and culture during the Middle Ages.

Les Très Riches Heures

Les Très Riches Heures is a highly celebrated illuminated manuscript of the 15th century, known for its detailed and vibrant illustrations, commissioned by the Duke of Berry.

Jean, Duke of Berry

A French nobleman known for his patronage of the arts and commission of the richly illuminated manuscript "Les Très Riches Heures du Duc de Berry."

Noble Patron

A member of nobility who supports, sponsors, or endorses artists and their work.