BASICS
This type of business is owned and run by one person.
Sole Proprietor
One advantage of a sole proprietorship is that decisions can be made this way.
Quickly and easily.
You decide to open your shop only on weekends to save costs. This kind of choice is an example of…
Business decision
A sole proprietor reports business income on this type of tax.
Personal income tax.
The person who owns a sole proprietorship is called this.
Sole Proprietor
A disadvantage is that the owner bears this for all debts.
Financial Responsibility.
You spend $20 on advertising and make $100 in sales. The money you made minus what you spent is called…
Profit
If a sole proprietor borrows money for the business, they are personally responsible for paying back this.
Debt or Loan
A sole proprietorship legally ends when this happens.
When the owner dies or closes the business.
Starting a sole proprietorship compared to a corporation is usually this.
Easier or cheaper.
You buy extra ingredients for your bakery and accidentally don’t use them before they expire. This loss is called…
Business expense or operating cost.
Profits from a sole proprietorship go directly to this person.
Owner
This term describes the owner being fully responsible for business debts.
Unlimited Liability
If the business fails, the owner may lose this besides business assets.
Personal assets like savings or a house.
You’re the only person making all pricing, hiring, and production decisions for your small store. This shows…
Sole control over your business.
In accounting for a sole proprietorship, after deducting operating expenses, owner withdrawals, and adjusting for accrued liabilities, the resulting figure that determines how much the proprietor could theoretically invest back into the business is called…
Net Income