Which one of the following statements concerning a proprietorship is true?
A) A proprietorship can be a business jointly owned by two family members.
B) Income from a proprietorship is taxed as a separate entity.
C) A proprietor is personally responsible for 100% of the ﬁrm's liabilities.
D) A partial transfer of ownership is easier with a proprietorship than with a corporation.
E) Income from a proprietorship is taxed at a lower rate than other personal income.

Question

Quizplus · Accepted Answer

A proprietorship is a business owned by one individual who is personally responsible for all of its liabilities. This means that the owner's personal assets may be at risk if the business incurs debt or faces a lawsuit. Choices A, B, D, and E are incorrect because they contain inaccurate statements.

Which One of the Following Statements Concerning a Proprietorship Is