Question

Sole traders differ from other types of trading organizations. Which of the following statements correctly summarizes the key characteristics of a sole trader's business?

• A. Liability is limited to the providers of loan finance and only the trader takes an active part in managing the business.
• B. The trader has unlimited liability and runs the business in conjunction with the providers of loan finance.
• C. The trader has unlimited liability and must have the business accounts audited.
• D. The trader has unlimited liability, takes sole responsibility for management of the busines.

Answer 1

Answer: (D)

The trader has unlimited liability, takes sole responsibility for management of the busines.

The trader has unlimited liability, takes sole responsibility for management of the busines.