Multiple Choice
Which of the following is a disadvantage to incorporating a business?
22
views
1. Introduction to Accounting
Business Organization
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is a key advantage of operating a business as a sole proprietorship?
A
The business enjoys unlimited access to capital markets.
B
The owner's personal assets are protected from business liabilities.
C
The business is taxed at a lower corporate tax rate.
D
The owner has complete control over business decisions.
Verified step by step guidance1
Understand the concept of a sole proprietorship: A sole proprietorship is a business structure where a single individual owns and operates the business. It is the simplest and most common form of business ownership.
Identify the key characteristics of a sole proprietorship: The owner has complete control over all business decisions, bears all profits and losses, and is personally liable for business debts and obligations.
Evaluate the options provided in the question: Analyze each statement to determine if it aligns with the characteristics of a sole proprietorship. For example, unlimited access to capital markets is not a feature of sole proprietorships, as they typically rely on personal funds or loans.
Focus on the correct answer: The owner having complete control over business decisions is a defining advantage of a sole proprietorship, as there are no partners or shareholders to consult.
Conclude the reasoning: The correct answer highlights the autonomy and decision-making power of the sole proprietor, which is a key advantage of this business structure.
Related Videos
Related Practice
Business Organization practice set
Problem sets built by lead tutorsExpert video explanations