If the Personal Assets of the Owners Cannot Be Claimed

question 242

Multiple Choice

If the personal assets of the owners cannot be claimed if the business is bankrupt, the owners are said to have

• A)unlimited liability.
• B)a proprietorship type of business.
• C)limited liability.
• D)a partnership type of business.

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Definitions:

Prepaid Rent Expense

An account representing rent payments made in advance for future periods, which is gradually expensed over the benefit period.

Contra-Asset

An asset account where the balance is expected to be a debit balance but is instead a credit balance, such as accumulated depreciation.

Worksheet

A spreadsheet used by accountants to prepare adjusting entries, financial statements, and to ensure the accounts balance before closing.

Accountant

A professional who performs accounting functions such as audits or financial statement analysis and is proficient in financial reporting and regulation.