Sole Trader Mastery Quiz
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Questions and Answers

What is the term UNLIMITED LIABILITY?

  • The business owner's personal assets are at risk if the business fails (correct)
  • The business owner is not liable for any business obligations
  • The business owner has no personal liability for business debts
  • The business owner's liability is limited to the amount invested in the business

    • What kind of business is a sole proprietorship?

  • A business owned by multiple individuals
  • A business owned by the government
  • A business owned by a corporation
  • A business owned by a single individual (correct)

    • What is another name for sole proprietorship?

  • Partnership
  • Sole trader (correct)
  • Corporation
  • Limited liability company

    • What is a benefit of being a sole trader?

    <p>Easy to set up</p> Signup and view all the answers

    What is the responsibility of a sole trader regarding business accounts?

    <p>Keep proper business accounts for the Inland Revenue</p> Signup and view all the answers

    What happens to the profit in a sole proprietorship?

    <p>The sole trader keeps all the profit</p> Signup and view all the answers

    What is a disadvantage of being a sole trader?

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

    Why might a sole trader face difficulty in expanding the business?

    <p>Banks are often not interested in investing in small businesses</p> Signup and view all the answers

    What is a benefit of being a sole trader?

    <p>Easy to set up</p> Signup and view all the answers

    What is a disadvantage of being a sole trader?

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

    What is required for a sole trader if sales reach a certain amount?

    <p>Keep proper business accounts for the Inland Revenue</p> Signup and view all the answers

    What happens to the profit in a sole trader business?

    <p>The sole trader gets to keep all the profit</p> Signup and view all the answers

    What is a characteristic of sole trader businesses?

    <p>Complete control over the business</p> Signup and view all the answers

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