COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A single owner who is also usually responsible for the day-to-day running of the business
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A single employee who is also usually responsible for the day-to-day running of the business
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A single retailer is also usually responsible for the day-to-day running of the business
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A single partner who’s also usually responsible for the day-to-day running of the business
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Detailed explanation-1: -It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name, such as Nancy’s Nail Salon.
Detailed explanation-2: -A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.
Detailed explanation-3: -An owner can either be a person or a legal entity that is the legal proprietor of a business. For example, a corporation (a legal entity) can be the owner of one or more companies. A sole proprietor specifically refers to the individual owner (proprietor) of a business being run as a sole proprietorship.
Detailed explanation-4: -A sole trader is a self-employed person who owns and runs their own business as an individual. A sole trader business doesn’t have any legal identity separate to its owner, leading many to say that as a sole trader you are the business.
Detailed explanation-5: -Sole proprietorship is the simplest and the oldest form of business under which an individual is able to conduct business. It does not need to be registered or incorporated. Therefore, it is not considered as a legal entity.