Which of the Following Is Not an Advantage of Starting

question 166

Multiple Choice

Which of the following is not an advantage of starting a new business as a proprietorship?

• A)The owner has complete control over the business.
• B)A proprietorship has few government rules and regulations to comply with.
• C)Business profits are only taxed once, not twice.
• D)A proprietorship can easily attain additional funding.

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Definitions:

Fixed Assets

Long-term tangible assets such as buildings, machinery, and equipment that a company uses in its operations and is not expected to consume or convert into cash within one year.

Net Income

The conclusive earnings a company achieves post the deduction of all operational expenses and tax liabilities from its income.

Operating Efficiency

A measure of how well a company uses its assets and manages its operations to generate income.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how efficiently a company uses investments to generate earnings growth.