Which of the Following Is an Advantage of a Limited

question 127

Multiple Choice

Which of the following is an advantage of a limited liability company compared to a corporation?

• A) Unlike a corporation, the members of a limited liability company are personally liable for the business's debts.
• B) Unlike a corporation, the members of a limited liability company need not file articles of organization with the state.
• C) Unlike a corporation, the members of a limited liability company cannot participate actively in management of the business.
• D) Unlike a corporation, the members of a limited liability company are taxed at the individual level only.

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Definitions:

Analyze Transaction

The process of reviewing and breaking down a financial transaction to understand its impact on the accounting equation.

Trial Balance

A bookkeeping worksheet listing the balances of all ledgers in two columns, debits and credits, to verify that the total debits equal total credits.

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profit.

Ledger

A book or collection of accounts in which transactions are recorded, categorized, and summarized.