What is the legal relationship of a sole proprietorship to its owner? A. The owner and the sole proprietorship are considered to be the same legal entity. B. A sole proprietorship can survive the death of its owner. C. The owner can shelter profits of a sole proprietorship from taxation. D. Then owner is not liable for debts incurred by the sole proprietorship.

What is the legal relationship of a sole proprietorship to its owner? A. The owner and the sole proprietorship are considered to be the same legal entity. B. A sole proprietorship can survive the death of its owner. C. The owner can shelter profits of a sole proprietorship from taxation. D. Then owner is not liable for debts incurred by the sole proprietorship.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter2: Introduction To Financial Statements

Section: Chapter Questions

Problem 7MC: Owners have no personal liability under which legal business structure? A. a corporation B. a...

See similar textbooks

Similar questions

A benefit of a sole proprietorship is that liability is limited to that of the business financial and assets not the personal assets of the owner/proprietor. true or false
Owners have no personal liability under which legal business structure? A. a corporation B. a partnership C. a sole proprietorship D. There is liability in every legal business structure.
If the assets of a corporation are not sufficient to satisfy the claims of its creditors, the creditors can make claims against the personal assets of the owners. True or False The owners of a corporation are personally responsible for the debts of the corporation. True or False
The tax rules for determining business income are identical to those used for determining property income True or False? When property acquired for personal use is sold for more than its cost, there will be a taxable capital gain True or False?
Which of the following is not a sale and therefore is not subject to the value-added tax? Transfer, use or consumption not in the ordinary course of business of goods or properties ordinarily intended for sale or use in the course of business. Distribution or transfer to shareholders or investors of share in the profits of a VAT-registered person. Distribution or transfer to creditors in payment of debt. Consignment sales.
1. Which of the following is not taxable income? a.Interest b.Hobby income c.Child support payments d.Royalties e.Dividends 2. Generally, for an activity to be treated as a trade or business, which of the following is required: a.No more than intermittent effort toward the activity b.Regular and continual effort designed to seek profit c.Always generate a profit d.Organization as a corporation or partnership 3. To be deductible as the cost of special work clothing or uniforms: a.The clothing need not be required as a condition of the job, but must not be suitable for everyday use. b.The clothing must be required as a condition of the job, but can also be suitable for everyday use. c.The clothing must not be suitable for everyday use and must be required as a condition of the job. d.Only the cost of the clothing is included; upkeep is not deductible.
What type of taxpayers (entities) are aﬀected by the passive loss rules? What is the signiﬁcance of a closely held corporation with regard to the deductibility of passive losses?
Which of the following is accurate regarding a real estate foreclosure transaction? A A foreclosure transaction can never involve recourse debt. B A foreclosure transaction can never involve nonrecoursedebt. C A foreclosure transaction has no federal income taxconsequences for the borrower. D A foreclosure transaction can have significant federalincome tax consequences for the borrower.
Which of the following statements is true of a sole proprietorship? A. A sole proprietorship has to pay business income taxes. B. A sole proprietorship joins two or more individuals as co−owners. C. The sole proprietor is personally liable for the liabilities of the business. D. A sole proprietorship is taxed separately from the owner.
Select the best answer. Which of the following statements regarding transfers of property or services is true? For a transfer of property to a corporation, no gain is recognized by the taxpayer if the O A. transferred property is encumbered with liabilities in excess of the taxpayer's basis in the property. O O O If receipt of stock is subject to a substantial risk of forfeiture, income is recognized by th B. recipient in the year the stock is received even though the substantial risk of forfeiture h lapsed. If the contributing partner receives a capital interest in the partnership upon contributi C. services, the contributor will be taxed on the transfer when the contributor actually rec profits. In order for an exchange of services to a partnership for a profit interest to qualify as a D. nontaxable event, the service partner must provide services to the partnership or for it benefit, and the services must be provided by the service partner in his capacity as a p Submit Answers
How do business owners determine their taxable income from their business ventures? How does this translate to not-for-profit entities?
Statement I: If there is co-ownership and one of t he co-owners is the insolvent debtor, his undivided share or interest in the property shall be possessed by the assignee in insolvency preceedings. Statement II: Property held by an insolvent debtor as a trustee shall be included in insolvence proceedings.a. Both statement are correct b. Both statement are incorrect c. Only Statement I is correct d. Only statement II is correct