Which One of the Following Statements Concerning a Sole Proprietorship

question 37

Multiple Choice

Which one of the following statements concerning a sole proprietorship is correct?

• A)A sole proprietorship is often structured as a limited liability company.
• B)The owner of a sole proprietorship may be forced to sell his/her personal assets to pay company debts.
• C)The owners of a sole proprietorship share profits as established by the partnership agreement.
• D)The profits of a sole proprietorship are taxed twice.
• E)A sole proprietorship is difficult to create.

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Definitions:

Flexible Budget Data

Financial information that adjusts based on changes in activity levels, often used for performance evaluation.

Profit Center

A branch or division of a company that is treated as a separate unit for the purpose of assessing its profitability.

Responsibility Report

Financial reports that track the performance of segments, departments, or managers within an organization against their budgeted or forecasted figures.

Controllable Fixed Costs

Expenses that remain constant for a given period but can be influenced or managed by decisions of a company's management.