Which of the Following Statements Is TRUE of a Sole

question 160

Multiple Choice

Which of the following statements is TRUE of a sole proprietorship?

• A) A sole proprietorship joins two or more individuals as co-owners.
• B) The sole proprietor is personally liable for the liabilities of the business.
• C) A sole proprietorship is taxed separately from the owner.
• D) A sole proprietorship has to pay business income taxes.

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Definitions:

Instinct

An innate, typically fixed pattern of behavior in animals that is responsive to specific stimuli and critical for survival.

Memory

The processes by which information is encoded, stored, and retrieved.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, preventing them from seeing potential alternative uses.

Mental Set

A tendency to approach situations in a certain way because that method worked in the past, possibly hindering the ability to find alternative solutions.