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 does not terminate at the choice or death of the owner.

Question

Quizplus · Accepted Answer

In a sole proprietorship, the owner is personally liable for the debts and liabilities of the business. This means that the owner's personal assets may be used to satisfy business debts if necessary. Choices A and D are incorrect because a sole proprietorship is owned by only one individual and does not involve co-ownership or shareholders. Choice C is also incorrect because a sole proprietorship does not have a separate legal entity for tax purposes and is taxed as part of the owner's personal income.

Which of the Following Statements Is True of a Sole