Page 133 - Business Principles and Management

Unit 2

individual taxpayers filed a Schedule C form (tax form for proprietorships) as
sole proprietors in 2001. Up to a third of all proprietorships are part-time. Part-
time proprietorships are especially appealing to stay-at-home parents.

CHECKPOINT
List the types of business that would be a good fit for a sole
proprietor.

5.2 Assessment

UNDERSTAND MANAGEMENT CONCEPTS
Circle the best answer for each of the following questions.
1. Advantages of proprietorships include all of the following except
a. owner is their own boss
b. owner receives all the profits
c. owner deals with limited red tape
d. owner pays more taxes than corporations
2. Disadvantages of proprietorships include all of the following except
a. owner is likely to have all of the skills needed for the business
b. owner may lack funds
c. owner bears all the losses
d. owner may need to close the business in case of illness

THINK CRITICALLY
Answer the following questions as completely as possible.
3. Explain how a balance sheet is used to show owner equity.
4. Explain why a business that is small enough to be managed by one or
a few people and does not require a large amount
of capital would be good for a proprietorship.

thomsonedu.com/school/bpmxtra

120