Which of the Following Statements Is CORRECT

question 40

Multiple Choice

Which of the following statements is CORRECT?

• A) One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability.
• B) It is generally easier to transfer one's ownership interest in a partnership than in a corporation.
• C) One of the advantages of the corporate form of organization is that it avoids double taxation.
• D) One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., "one person, one vote."
• E) Corporations of all types are subject to the corporate income tax.

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Definitions:

Inventory

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials to be consumed in the production process.

Purchases Discount

A reduction in the cost of goods or services, granted by the seller to the buyer, when the buyer pays within a specified time frame.

Sales Discount

A reduction in the price of goods or services offered to customers, typically to prompt quick payment or bulk purchases.

Trade Discounts

Reductions in the listed price of goods and services, offered by sellers to buyers in the business-to-business market.