An Advantage of the Proprietorship as a Form of Business

question 295

Multiple Choice

An advantage of the proprietorship as a form of business organization is

• A) its limited liability.
• B) its limited access to capital, thus reducing the possible size of debt.
• C) that it is easy to form.
• D) that it can sell bonds to the public.

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Definitions:

Collection Float

The time gap between when a check is deposited into a bank account and when the funds become available.

Opportunity Cost

Opportunity cost refers to the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Net Float

The difference between checks written against and deposited in an account and those that have been cleared and charged against the account.

Short-term Investments

Financial assets that are expected to be converted into cash or sold within a short timeframe, usually one year or less.