- 1 Marks
FA – Nov 2013 – L1 – SA – Q4 – Financial Statements Preparation
Identifying a key difference between sole traders and limited liability companies.
Question
Which of the following is the difference between sole traders and limited liability companies?
A. A sole trader’s financial statements are private and never made available to third parties; a company’s financial statements are given to shareholders and may be publicly filed.
B. Both businesses have share capital.
C. Only drawings appear in a sole trader’s financial statements.
D. A sole trader is fully and personally liable for any losses that the business might make, while a company’s losses are borne by the government.
E. Both the sole trader and companies issue loan notes in order to raise funds.
Find Related Questions by Tags, levels, etc.
- Tags: Business Entities, Financial Statements, Limited Liability, Sole Traders
- Level: Level 1
- Topic: Financial Statements Preparation
- Series: NOV 2013
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