Joe Smith Owns a Bookstore as a Sole Proprietor

question 110

Multiple Choice

Joe Smith owns a bookstore as a sole proprietor.He is also a partner in a hotel,which borrowed $100 000 from the bank.Which of the following statements is true?

• A)The bank can look to the assets of the bookstore to pay off the debt.
• B)Although the bank can go after Smith's personal assets,it cannot go after the assets of the bookstore because the bookstore is a separate legal entity from Smith.
• C)The bank can only go after the assets of the bookstore if Smith is the actual person who negotiated the loan with the bank.
• D)The bookstore's assets will only be available to the bank if the bookstore is operated by Smith in conjunction with the hotel.
• E)Because of the concept of limited liability,Smith can lose only what he has invested in the hotel.

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Definitions:

Brand Name

A unique designation given to goods or services provided by a specific manufacturer or provider, used to distinguish them from competitors.

Actual Product

The physical attributes of a product including the brand name, features/design, quality level, and packaging.

Product Warranty

A guarantee from the manufacturer or seller regarding the condition of a product and a commitment to repair or replace it if necessary within a specified period.

Product Line

A group of related products marketed under a single brand by a company, often catering to different customer needs or preferences.