Any form of wealth held by a sole proprietor will be factored into the terms of the loans she receives because:
A)her liability is limited.
B)her business is inseparable from her.
C)her business is too small to bear investment risks.
D)her investment decisions depend on her total output.

Question

Quizplus · Accepted Answer

As a sole proprietor, the owner and the business are inseparable. This means that any form of personal wealth (such as assets and liabilities) is considered a part of the business's financial position. Therefore, when the proprietor applies for loans or financing, the lender will consider both the owner's personal finances and the business's finances in making a decision. This is because the owner is personally responsible for the debts and obligations of the business.

Any Form of Wealth Held by a Sole Proprietor Will