Jeremy Is Thinking of Starting Up a Small Business Selling

question 198

Multiple Choice

Jeremy is thinking of starting up a small business selling NASCAR memorabilia.He is considering setting up his business as a sole proprietorship.What is one disadvantage to Jeremy of setting up his business as a sole proprietorship?

• A)As a sole proprietor, Jeremy would be taxed twice.
• B)As a sole proprietor, Jeremy would not have control of the business.
• C)As a sole proprietor, Jeremy would face unlimited liability.
• D)As a sole proprietor, Jeremy would be subject to significant rules and regulations.

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Definitions:

Actual Costs

The real expenses incurred for materials, labor, and overhead in the production of goods or services, as opposed to estimated or budgeted costs.

Standard Costs

Predetermined costs for the manufacturing of products or performing services under normal conditions, used as benchmarks to measure actual performance.

Accountants

Professionals who manage and analyze financial records to ensure accuracy and compliance with laws and regulations.

Financial Expertise

The knowledge and skills related to managing money, investments, and financial analysis, often essential for making informed business decisions.