Which One of the Following Statements Is Correct

question 42

Multiple Choice

Which one of the following statements is correct?

• A) Both partnerships and corporations incur double taxation.
• B) Both sole proprietorships and partnerships are taxed in a similar fashion.
• C) Partnerships are the most complicated type of business to form.
• D) Both partnerships and corporations have limited liability for general partners and shareholders.
• E) All types of business formations have limited lives.

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Definitions:

Economies Of Scale

Financial benefits that firms receive from their size of operations, where the cost for every produced unit tends to drop as the operational scale expands.

Low-cost Inputs

Inputs are materials or resources used in the production process, and low-cost inputs refer to acquiring these materials or resources at the lowest possible cost to maximize profitability.

Differentiation Strategy

A business approach focusing on developing and marketing unique products or services to stand out from competitors and attract a specific segment of the market.

Creative Ideas

Novel and innovative thoughts or concepts, especially ones that can be implemented to solve a problem or improve a situation.