What Is a Disadvantage to Sole Proprietorship

question 27

Multiple Choice

What is a disadvantage to sole proprietorship?

• A) Your personal assets are exposed to liability claims
• B) Your income is taxed twice
• C) You must issue dividends
• D) None of the above

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Definitions:

Weighted-Average Method

An inventory costing approach where the cost of goods sold and ending inventory values are determined using the average cost of all inventory items, weighted by the quantity of each.

Conversion Costs

The combined costs of direct labor and manufacturing overhead, representing the expenses necessary to convert raw materials into finished products.

Blending Department

A production department focused on combining various raw materials or components into a final product in a consistent and homogeneous manner.

Weighted-Average Method

An inventory costing method that averages out all costs of inventory available for sale during the period.