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The Financing Option That Creates No Liabilities or Interest Expense

question 174

Multiple Choice

The financing option that creates no liabilities or interest expense is financing by:


Definitions:

Corporation

A legal entity separate from its owners, offering limited liability to its shareholders and able to own property and sign contracts.

Close Corporation

A corporation whose shareholders are limited to a small group of persons, often family members.

Shares

Units of ownership in a corporation or financial asset, representing a portion of the company and conferring certain rights and liabilities to the shareholder.

Partnership

A legal arrangement where two or more individuals engage in business together, sharing profits, liabilities, and decision-making.

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