Multiple Choice
Which of the following is an advantage of a hybrid form of business ownership, such as an LLC or LLP?
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1. Introduction to Accounting
Business Organization
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A business plan might also be called a:
A
prospectus
B
balance sheet
C
strategic plan
D
audit report
Verified step by step guidance1
Understand the purpose of a business plan: A business plan is a document that outlines the goals, strategies, and financial projections of a business. It serves as a roadmap for the business's operations and growth.
Analyze the options provided: The options include prospectus, balance sheet, strategic plan, and audit report. Each term has a specific meaning in financial accounting and business contexts.
Define each term: A prospectus is a formal document issued to potential investors, detailing the investment opportunity. A balance sheet is a financial statement showing a company's assets, liabilities, and equity at a specific point in time. A strategic plan outlines long-term goals and strategies for achieving them. An audit report is a formal opinion issued by an auditor regarding the accuracy of a company's financial statements.
Compare the definitions to the purpose of a business plan: A business plan aligns most closely with a strategic plan, as it focuses on outlining goals and strategies for the business's future operations and success.
Conclude that the correct answer is 'strategic plan,' as it best matches the purpose and content of a business plan.
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