Which of the following statements is true of a sole proprietorship?
A)A sole proprietorship joins two or more individuals as co-owners.
B)The sole proprietor is personally liable for the liabilities of the business.
C)A sole proprietorship is taxed separately from the owner.
D)A sole proprietorship has to pay business income taxes.

Question

Quizplus · Accepted Answer

In a sole proprietorship, the business is owned and operated by one person. Unlike a partnership or corporation, there are no co-owners. As the sole owner, the proprietor is personally liable for the debts and obligations of the business. The profits and losses of the business are reported on the owner's personal income tax return, and the business itself is not taxed separately.

Which of the Following Statements Is True of a Sole