Which of the Following Is True About a Sole Proprietorship

question 70

Multiple Choice

Which of the following is true about a sole proprietorship in the United States?

• A)It is the most common form of business organization.
• B)It is responsible for a large portion of the total production of goods and services.
• C)It offers the owner the least personal liability of any form of business organization.
• D)There is no opportunity cost to operating the business.
• E)Only one individual can work in such a firm.

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Definitions:

Scope of Authority

The scope of authority delineates the range of actions or decisions that an individual or entity, such as an employee or agent, is officially empowered to make on behalf of another party or organization.

Undisclosed Principal

A situation in an agency relationship where the identity of the principal is not revealed to the third party by the agent.

Liable

Legally responsible or answerable for an action or a situation.

Scope of Authority

The range or extent of power that an individual or organization legally has to make decisions or take action.