A Primary Reason to Open a Business as a Sole

question 1

Multiple Choice

A primary reason to open a business as a sole proprietorship instead of forming a corporation for business ownership is that:

• A)finding managers is easier in a sole proprietorship.
• B)it is easier to obtain bank and small business loan funding as a sole proprietorship.
• C)a sole proprietorship avoids double taxation of the owner and business.
• D)a sole proprietorship provides limited liability for the owner.

---

Definitions:

Managers

Individuals responsible for planning, directing, and overseeing the operations and fiscal health of a portion of an organization or the entire organization.

Flexible Budgets

Budgets that adjust or flex according to changes in activity levels or other factors that influence operating expenses.

Unfavorable Variance

A situation where actual costs exceed budgeted or expected costs.

Efficiency Variance

The difference between the actual input used in production and the standard input that was expected to be used.