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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Which of the following statements is false concerning forms of business organization?

  1. A corporation has tax advantages over the other forms of business organization.
  2. It is easier for a corporation to raise large sums of money than it is for a sole proprietorship or partnership.
  3. A sole proprietorship is an easy type of business to form.
  4. Owners Of sole proprietorships and partnerships have personal liability for the debts of the business while owners of corporations have limited legal liability.

To determine

Concept Introduction:

Forms of business organization: A business can be started in any form of business organization. The form of business organization can be a sole proprietorship, a general partnership, a limited partnership, a limited liability partnership, S corporation, a corporation or a limited liability company.

To choose:

The false statement about the forms of the business organization.

Explanation

Explanation for correct answer: A Corporation does not have tax advantage over other forms of business organization; rather it has more complex tax structure.

Explanation for incorrect answers:

b...

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