Which One of the Following Statements Concerning a Sole Proprietorship

question 33

Multiple Choice

Which one of the following statements concerning a sole proprietorship is correct?

• A)The ability to raise capital is limited by the owner's personal wealth.
• B)The proprietorship pays taxes at the corporate tax rate.
• C)The ownership of the firm is easy to transfer to another individual.
• D)The company must pay income taxes separate from the taxes paid by the owner.
• E)The legal costs to form a sole proprietorship are quite substantial.

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Definitions:

Information System

A set of components that work together to manage and process data, transforming it into useful information for decision-making.

Collusion

A secret agreement or cooperation between two or more parties for a fraudulent, illegal, or deceitful purpose, often in business or trade practices.

Internal Control System

An internal control system encompasses the rules, procedures, and measures implemented by an organization to safeguard assets, enhance the reliability of financial reports, and ensure compliance with laws and regulations.

Systems Design

The process of defining the architecture, components, modules, interfaces, and data for a system to satisfy specified requirements.