PLEASE EXPLAIN WHY IT\'S THE ANSWER 9) Which of the following is not an advantag

Question

PLEASE EXPLAIN WHY IT'S THE ANSWER

9) Which of the following is not an advantage of a sole proprietorship? a) The owner receiving all the after-tax profit b) Limited liability c) Quick decision making d) All of the above 10) Double taxation refers to which of the following scenarios? a) Both bondholders and shareholders of a corporation must pay taxes on proceeds b) The corporation pays taxes on its earnings, and creditors pay taxes on interest c) The corporation pays taxes on its earnings, and shareholders pay taxes on d) All of the above statements are correct. received. received. dividends received. 11) In agency theory, the owners of the business are and the managers are a) Bondholders, principals b) Stockholders, bondholders c) Agents, principals d) Principals, agents

Explanation / Answer

9) A sole propreitership means a single owner who runs the business as a individual capacity. Since sole propreitership act mainly on individual basis so it has unlimited liability.

so answer will be b) Limited liability

The other option is invalid as because sole propreitership acts alone and so he gets all the profit alone only and also takes decision very quicly as no approval is required.

10) Answer will be c) The corporation pays taxes on its earnings, and shareholders pays taxes on dividend received.

since dividend earnings are already after tax. A company has to pay corporate dividend tax on its distributed income and then again the shareholders has to pay tax on the same income, hence it is a double taxation.

11) d) Principals, agents.

A agency businesses is basically done on behalf of someones else. Hence the main owners remains the same persons the agency acts only on distribution of its product. So main owner is principal and the managers are agents.

please like the answer, thumps up and feel free to comment thank you

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