Which of the Following Statements Is CORRECTσ

question 13

Multiple Choice

Which of the following statements is CORRECTσ

• A) it is generally more expensive to form a proprietorship than a corporation because, with a proprietorship, extensive legal documents are required.
• B) corporations face fewer regulations than sole proprietorships.
• C) one disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation, at both the firm level and the owner level.
• D) one advantage of forming a corporation is that equity investors are usually exposed to less liability than in a regular partnership.
• E) if a regular partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

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Definitions:

Bystander Effect

A social psychological phenomenon where individuals are less likely to offer help to a victim when other people are present.

Social-Responsibility Norm

A societal rule that people should help those who need assistance, even if doing so is costly.

Social Exchange Theory

A theory suggesting that social behavior is the result of an exchange process aiming to maximize benefits and minimize costs.

Equity

The concept of fairness or justice in situations, ensuring everyone has equal access to resources and opportunities.