Which of the Following Is an Advantage of Starting a New

question 174

Multiple Choice

Which of the following is an advantage of starting a new business as a proprietorship?

• A)The owner has limited personal liability.
• B)A proprietorship has few government rules and regulations to comply with.
• C)Business profits are not taxed.
• D)A proprietorship can easily attain additional funding.

---

Definitions:

Variable Costs

Financial outlays that adjust based on the quantity of products made or the scale of sales transactions.

Fixed Costs

Business expenses that do not change in proportion to the level of goods or services that a company produces over a short term.

CVP Income Statement

A financial statement that shows the effects of changes in cost and volume on a company's profits, based on Cost-Volume-Profit analysis.

Raw Material

Basic materials used in the production process that are transformed into finished goods.