Internal Use of Accounting Information
10 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary purpose of a business?

  • To provide goods and services for free
  • To earn profit and increase the wealth of its owners (correct)
  • To limit personal liability
  • To control the affairs of other businesses
  • What is a 'sole proprietorship' business?

  • A business that focuses on distributing profits to employees
  • A business that limits personal assets from being used for debts
  • A business owned by a single individual (correct)
  • A business with multiple owners
  • What distinguishes the owner from an employee in a sole proprietorship?

  • Both have equal control over the operational aspects
  • The owner has sole control over operational and monetary aspects (correct)
  • Employees have more authority over controlling business affairs
  • Employees are not involved in day-to-day operations
  • What is a disadvantage of a sole proprietorship?

    <p>Unlimited personal liability for the owner</p> Signup and view all the answers

    In a sole proprietorship, who may be compelled to use personal assets to pay business debts?

    <p>The proprietor</p> Signup and view all the answers

    Which legal form of business allows for only one owner with sole control over operations?

    <p>Sole proprietorship</p> Signup and view all the answers

    What is a benefit of a sole proprietorship in terms of forming the business?

    <p>Easy to form with fewer legal requirements</p> Signup and view all the answers

    Why might a sole proprietorship face challenges in raising capital?

    <p>'Unlimited personal liability' clause in its legal structure</p> Signup and view all the answers

    What would be a consequence if a sole proprietorship incurs significant debts?

    <p>'Unlimited personal liability' affecting personal assets</p> Signup and view all the answers

    'Unlimited personal liability' is a characteristic of which legal form of business?

    <p>'Sole proprietorship'</p> Signup and view all the answers

    Use Quizgecko on...
    Browser
    Browser