Which One of the Following Statements Is True

question 52

Multiple Choice

Which one of the following statements is true?

• A) Limited partnerships are no more costly to form than sole proprietorships.
• B) Like a corporation, an LLC provides limited liability for the people who make the business decisions in the firm while enabling all investors to retain the tax advantages of a limited partnership.
• C) The lives of partnerships and LLCs are not flexible.
• D) Limited partners and LLCs are more constrained than general partnerships because they can raise money only from limited partners or "members."

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Definitions:

Ratio Analysis

A quantitative analysis method used to evaluate a company's financial health by calculating ratios from financial statements.

Operating Activities

Transactions and other events that affect the net income of a business, relating to its principal revenue-producing operations.

Statement of Cash Flows

A financial report that summarizes the amount of cash and cash equivalents entering and leaving a company.

Quick Ratio

A liquidity indicator that measures a company's ability to meet short-term obligations with its most liquid assets.