According to the entity concept
I.a sole proprietorship is similar to a conduit entity.
II.a sole proprietor cannot convert nondeductible personal items into deductible business items by commingling expenditures.
III.a partnership is an example of a mixture of a taxable and a conduit entity.
IV.an S corporation is a tax paying entity.

Question

According to the entity concept
I.a sole proprietorship is similar to a conduit entity.
II.a sole proprietor cannot convert nondeductible personal items into deductible business items by commingling expenditures.
III.a partnership is an example of a mixture of a taxable and a conduit entity.
IV.an S corporation is a tax paying entity.
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Quizplus · Accepted Answer

Statements I and II are correct because a sole proprietorship is a conduit entity, meaning that the business's income and expenses are passed through to the owner's personal tax return. This means that the owner cannot convert nondeductible personal items into deductible business items by commingling expenditures.

According to the Entity Concept