Question

Maria has a lot of self-confidence and business knowledge. She recently opened a bakery as a sole proprietor. She is expecting a high level of profits and is looking forward to:a. keeping all of the money she earns since she does not have to pay taxes as a sole proprietor.
b. keeping all of the money she earns except for the taxes she is required to pay.
c. easily raising additional large sums of money from the capital markets since she is a sole proprietor.
d. the lower corporate tax rate paid by sole proprietorships.

Answer 1

Answer:

Correct option is (b)

Explanation:

Sole proprietorship is owned by a single person. The business is not separate from the owner and owner is responsible for the liabilities and assets of the organization.

Owners enjoy the entire profits earned from business less taxes paid to the government. Similarly, owners bear the losses incurred from operations.The owner does not have to share profits with anyone like in the case of partnership firms and corporations.