If a proprietorship cannot pay its debts,the creditors may make claims against the:
A) assets of the proprietorship only.
B) assets of the proprietor.
C) state government.
D) employees of the business.

Question

Quizplus · Accepted Answer

In a proprietorship, the owner and the business are considered the same entity. Therefore, if the business cannot pay its debts, the creditors can make claims against the assets of the proprietor. This means that the owner's personal assets, such as their house, car, and personal bank accounts, may be at risk if the business owes money. The state government and employees are not liable for the business's debts.

If a Proprietorship Cannot Pay Its Debts,the Creditors May Make