Personal Finance and Economics Review 3

Front

Which of the following is a characteristic of a sole proprietorship? It has limited liability, It is owned by two or more people, The owner has unlimited liability, It can issue shares of stock

Back

The owner has unlimited liability

Front

In a sole proprietorship, who is responsible for the debts of the business?

Back

The owner personally

Front

Which of the following is a disadvantage of a sole proprietorship?
Options:
Ease of decision-making,
Flexibility in management,
Limited access to capital,
Pass-through taxation

Back

Limited access to capital

Front

Which tax advantage is associated with a sole proprietorship?

Back

Pass-through taxation

Front

In a partnership, the profits are typically shared

Back

based on the investment ratio

Front

Which of the following is true about partnerships?
Each partner has limited liability
The business has a separate legal identity from its owners
All partners are personally liable for the debts of the business
Partnerships cannot be dissolved

Back

All partners are personally liable for the debts of the business

Front

What is a major disadvantage of a partnership?

Back

Unlimited liability for partners

Front

Which of the following types of partnerships allows for limited liability for some partners?
Options: Limited partnership, General partnership, Sole proprietorship, Corporation

Back

Limited partnership

Front

Which of the following is a feature of a corporation? Shareholders have limited liability, It is owned by one person, The owners have unlimited liability, It is subject to pass-through taxation

Back

Shareholders have limited liability

Front

What is a disadvantage of forming a corporation?

Back

Double taxation on income.