Which One of the Following Statements Correctly Applies to a Sole

question 36

Multiple Choice

Which one of the following statements correctly applies to a sole proprietorship?

• A)The business entity has an unlimited life.
• B)The ownership can easily be transferred to another individual.
• C)The owner enjoys limited liability for the firm's debts.
• D)Debt financing is easy to arrange in the firm's name.
• E)Obtaining additional equity is dependent on the owner's personal finances.

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Definitions:

Flexible Budgets

Flexible budgets are financial plans that can vary depending on actual levels of output, activity, or revenue, allowing businesses to adjust their spending and resources more dynamically.

Fixed Budgets

Financial plans that do not change over the budget period, regardless of changes in business activity.

Cost Variance

The difference between the budgeted or planned costs and the actual costs incurred.

Quantity Variance

A measure used in cost accounting to calculate the difference between the actual quantity of materials or labor used and the expected quantity.