Exploring the Nature and Forms of Business
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Questions and Answers

Which of the following is the correct definition of a sole proprietorship?

  • A business organization where goods and services are exchanged for one another or for money.
  • A business owned by multiple people and operates for their benefit.
  • A business where the owner has limited liability and is not responsible for any debts.
  • A business where the owner operates alone and has unlimited liability for all obligations. (correct)

What is the advantage of a sole proprietorship?

  • It provides access to a larger pool of resources.
  • It provides limited liability for the owner.
  • It allows for shared decision-making among multiple owners.
  • It is the easiest and least expensive form of ownership to organize. (correct)

What is the disadvantage of a sole proprietorship?

  • It is the easiest and least expensive form of ownership to organize.
  • The owner has unlimited liability and is legally responsible for all debts against the business. (correct)
  • It provides limited liability for the owner.
  • It allows for shared decision-making among multiple owners.

What assets belong to a sole proprietor?

<p>Both the business assets and personal assets of the owner. (C)</p> Signup and view all the answers

What is the nature of a sole proprietorship?

<p>A business where the owner operates alone and has unlimited liability. (D)</p> Signup and view all the answers

Which one of the following is a characteristic of a sole proprietorship?

<p>Limited liability for the owner (C)</p> Signup and view all the answers

What type of assets belong to a sole proprietor?

<p>Both personal and business assets (C)</p> Signup and view all the answers

What is the main advantage of a sole proprietorship?

<p>Low organization cost (B)</p> Signup and view all the answers

What is the main disadvantage of a sole proprietorship?

<p>Unlimited liability for the owner (A)</p> Signup and view all the answers

What is the nature of a sole proprietorship?

<p>Owned and operated by one person (C)</p> Signup and view all the answers

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