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Martha Started a Flower Shop as a Sole Proprietor

Question 43

Multiple Choice

Martha started a flower shop as a sole proprietor.After 1 year,she was forced to close the shop because business was so bad.At that time,the business assets totaled $50,000,but the business liabilities totaled $125,000.Which of the following statements is true?


A) Martha is personally liable for the additional $75,000.
B) Martha's business creditors can collect only the $50,000 of business assets.
C) Martha's business creditors can collect only the $50,000 now,but if Martha ever goes into business again,they can get the assets of the new business.
D) Once Martha terminates the sole proprietorship,the business creditors cannot even get the $50,000.

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