Bill Is Starting Up a New Business

question 72

Multiple Choice

Bill is starting up a new business. In order to raise the capital needed for the business, Bill has sold shares of his company to a few close relatives. This type of structure is known as a

• A) sole proprietorship.
• B) private corporation.
• C) macroenterprise.
• D) public enterprise.
• E) public corporation.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities; essentially the net worth of a company.

Note Payable

A written promise to pay a specific amount of money, usually with interest, by a certain date.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.