Business/Professional Ethics Directors/Executives/Acct
8th Edition
ISBN: 9781337485913
Author: BROOKS
Publisher: Cengage
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Students have asked these similar questions
A common disadvantage of a sole proprietorship is
a) that the owner must share profits with others.
b) double taxation of earnings.
c) the limited life of the business.
d) difficulty starting the business.
What term is used to describe the characteristic of a business entity where an individual(s) associated with an entity can not only lose all of his/her investment in the firm but personal assets can be taken to pay the debts of the firm if necessary?
Group of answer choices
unlimited liability
limited liability
dissolution
mutual agency
Which of the following is true about this statement: "In a sole proprietorship, the owner's personal assets are at risk if the business is not successful." Is this true?
a)
No, personal assets are protected by sole proprietorship laws.
b)
Yes, there is no protection for personal assets with sole proprietorships.
c)
No, personal assets are only at risk with corporations.
d)
Yes, this is true for all forms of business.
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- Why do the basis and at-risk rules usually prevent the same amount of losses from passing through to shareholders of S corporations? Need Proper explanationarrow_forwardHudson Signs, Inc., needs funds, and Alley Hudson, the president, has asked you to considerinvesting in the business. Answer the following questions about the different ways that Hudsonmight organize the business. Explain each answer.a. What forms of organization will enable the owners of Hudson Signs, Inc., to limit theirrisk of loss to the amounts they have invested in the business?b. What form of business organization will give Alley Hudson the most freedom to manage the business as she wishes?c. What form of organization will give creditors the maximum protection in the event thatHudson Signs, Inc., fails and cannot pay its debts?arrow_forwardThe losses from the following sources are considered non-capital loss except _________. Business loss Rental loss Professional loss Capital lossarrow_forward
- In an S Corporation are the unit holders liable for business losses too?arrow_forwardWhat are some of the non-financial factors you would consider if you were faced with a decision related to keeping or terminating a business segment? Can you think of a time when you experienced a dropped segment? Were there consequences other than financial that affected the company?arrow_forwardWhich of the following can be used to offset a passive loss? a.Dividend income from stock held as an investment b.Active income such as wages c.Pension income d.Passive income such as income from a limited partnershiparrow_forward
- While meeting with a CPA, a new business owner finds out that the business is considered a pass-through entity. What does that mean? a) The profits of the business are taxed as income to the owner. b) The profits of the business are taxed as income to the company. c) The owner's personal assets are not at risk even if the business fails. d) The business will only have a few employees.arrow_forwardThis business starts with relatively small amount of capital and the owner proprietor is only person entitled to receive all profits and liable to bear all losses and debts. a. Partnership b. Multinational Companies c. Corporation d. Sole Proprietorshiparrow_forwardDescribe the three hurdles partner John must pass if he wants to deduct a loss from his share in an S corporation. What other loss limitation rule may impact the deductibility of losses from an S corporation?arrow_forward
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