Multiple Choice
Which of the following terms best describes the process of dividing the work and assigning tasks to workers?
112
views
1. Introduction to Accounting
Business Organization
Multiple Choice
Which of the following is an advantage that partnerships have over sole proprietorships?
A
Easier transfer of ownership than corporations
B
Pooled knowledge and resources
C
Double taxation of profits
D
Limited liability for all owners
Verified step by step guidance1
Step 1: Understand the question by identifying the key focus, which is to determine the advantage partnerships have over sole proprietorships.
Step 2: Review the characteristics of partnerships. Partnerships involve two or more individuals who share ownership, responsibilities, and decision-making. This structure allows for pooling of knowledge and resources, which is a key advantage.
Step 3: Compare partnerships to sole proprietorships. Sole proprietorships are owned and operated by a single individual, which limits the ability to pool resources and knowledge. Partnerships, on the other hand, benefit from the combined expertise and assets of multiple owners.
Step 4: Eliminate incorrect options. For example, 'Double taxation of profits' applies to corporations, not partnerships. 'Limited liability for all owners' is incorrect because partnerships typically have unlimited liability unless structured as a limited partnership.
Step 5: Confirm the correct answer, which is 'Pooled knowledge and resources,' as this is a distinct advantage partnerships have over sole proprietorships.
Related Videos
Related Practice
