Sole Trader Business Questions PDF

 **What is a sole trader?** - A\) A person who works with multiple business partners - B\) A self-employed person who runs their own business - C\) A company with many employees - D\) A large corporation **Answer:** B  **Which of the following is a characteristic of a sole trader?**...

 **What is a sole trader?** - A\) A person who works with multiple business partners - B\) A self-employed person who runs their own business - C\) A company with many employees - D\) A large corporation **Answer:** B  **Which of the following is a characteristic of a sole trader?** - A\) They cannot employ other people - B\) They must have a business partner - C\) They control and manage the business on their own - D\) They have limited responsibility for debts **Answer:** C  **Why might someone choose to be a sole trader?** - A\) It's very expensive to set up - B\) There are no compulsory start-up costs - C\) It requires legal partnership agreements - D\) It's only available for big businesses **Answer:** B  **Which of the following businesses would likely use a sole trader structure?** - A\) A multinational bank - B\) A government organization - C\) A freelance graphic designer - D\) A large retail chain **Answer:** C  **What is one main advantage of being a sole trader?** - A\) Minimal financial reporting requirements - B\) Tax-free income - C\) Employee benefits like paid leave - D\) Limited liability **Answer:** A  **What is meant by \"unlimited liability\" in a sole trader business?** - A\) The owner has limited control over the business - B\) The owner has to share profits - C\) The owner is fully responsible for any debts or losses - D\) The business is protected from debt **Answer:** C  **Which of the following is a disadvantage of being a sole trader?** - A\) Limited liability for debts - B\) High financial reporting requirements - C\) No control over the business - D\) Personal assets are at risk if the business has debts **Answer:** D  **Which of these is *not* a benefit of being a sole trader?** - A\) Low start-up costs - B\) Ability to control all business decisions - C\) Unlimited liability - D\) The money earned goes directly to the owner **Answer:** C  **If a sole trader\'s business grows, what is one option they have?** - A\) They must stay as a sole trader - B\) They can easily change to a company or partnership - C\) They have to close the business - D\) They can't employ others **Answer:** B  **What might a sole trader need to pay for to reduce their risk?** - A\) Extra partnerships - B\) Insurance - C\) Employee benefits - D\) High start-up fees **Answer:** B