Question

In case of sole proprietorship there is a _______ between _________.

• A. Direct link, effort and reward
• B. Indirect link; Profit and loss
• C. Direct link; Profit and loss
• D. Indirect link; effort and reward

Answer 1

The correct option is A Direct link, effort and reward

Option A is the correct answer.

In sole proprietorship, there is only person who is entitled to all the profits and losses. Therefore it creates a direct link between efforts and rewards. The scale of profit is dependent upon the efforts put in by owner.