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Questions and Answers
Sole proprietors can obtain external sources of finance from investors, creditors, and trade credit.
Sole proprietors can obtain external sources of finance from investors, creditors, and trade credit.
False
Bank overdraft for sole proprietors requires interest payment only when the account is not overdrawn.
Bank overdraft for sole proprietors requires interest payment only when the account is not overdrawn.
False
The profit of a business can be reinvested without any financial charges as an internal source of finance.
The profit of a business can be reinvested without any financial charges as an internal source of finance.
True
In a partnership, a partnership agreement is needed to specify the division of profits and the ownership percentage of each partner.
In a partnership, a partnership agreement is needed to specify the division of profits and the ownership percentage of each partner.
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The sale of assets that are not needed can be considered an external source of finance for sole proprietors.
The sale of assets that are not needed can be considered an external source of finance for sole proprietors.
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Trade credit for sole proprietors is based on an agreement with investors rather than suppliers.
Trade credit for sole proprietors is based on an agreement with investors rather than suppliers.
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A sole proprietorship is a business that is owned by multiple people.
A sole proprietorship is a business that is owned by multiple people.
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In a sole proprietorship, the owner's personal income tax statement is separate from the business profits.
In a sole proprietorship, the owner's personal income tax statement is separate from the business profits.
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A sole proprietorship has its own legal entity.
A sole proprietorship has its own legal entity.
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The owner of a sole proprietorship is not liable for any debts or obligations.
The owner of a sole proprietorship is not liable for any debts or obligations.
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A sole proprietorship requires a significant amount of financial investment to establish.
A sole proprietorship requires a significant amount of financial investment to establish.
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If a sole proprietor wants to share management decisions, they must convert their business into a partnership.
If a sole proprietor wants to share management decisions, they must convert their business into a partnership.
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In a general partnership, partners may have unequal rights, liabilities, and responsibilities.
In a general partnership, partners may have unequal rights, liabilities, and responsibilities.
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In an 'Offene Gesellschaft' (OG) in Austria, each partner has limited liability.
In an 'Offene Gesellschaft' (OG) in Austria, each partner has limited liability.
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Limited partnerships require that all partners must be actively involved in the management of the business.
Limited partnerships require that all partners must be actively involved in the management of the business.
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In a 'Kommanditgesellschaft' (KG) in Austria, the partner not involved in management has unlimited liability.
In a 'Kommanditgesellschaft' (KG) in Austria, the partner not involved in management has unlimited liability.
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Corporations have the same rights and obligations as people, such as owning land and property.
Corporations have the same rights and obligations as people, such as owning land and property.
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The shareholders of a corporation are usually liable for debts beyond the amount they invested in buying shares.
The shareholders of a corporation are usually liable for debts beyond the amount they invested in buying shares.
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