Which of the Following Statements Is False Regarding a Sole

question 72

Multiple Choice

Which of the following statements is false regarding a sole proprietorship?

• A)A sole proprietorship requires few legal formalities.
• B)A sole proprietor has complete control of the management of the business.
• C)The sole proprietor keeps all the profits from the business.
• D)A sole proprietor is not personally liable for obligations of the business.
• E)Profits are taxed as the personal income of the sole proprietor.

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Definitions:

Cash Payments

Transactions in which money is paid out or disbursed by a business, typically related to operational expenses, purchases, or other financial obligations.

Raw Materials Inventory

The total cost of all components and materials a company holds that are yet to be used in the manufacturing process.

Direct Material

Direct Material refers to the raw materials that can be directly attributed to the production of goods, clearly identifiable and quantifiable.

Production Needs

Refers to the resources and requirements necessary to manufacture goods or provide services, including materials, labor, and machinery.