Question

The basic concepts of financial management are the same for all businesses, regardless of how their organized. However, a firms legal structure affects its operations. The main forms of business organizations are: 1) proprietorships, 2) partnerships, 3) corporations, and 4) limited liability companies (LLCs) and limited liability partnerships (LLPs). However, based on the dollar value of sales, most business is done by ______.

a) proprietorships
b) partnerships
c) corporations
d) limited liability companies/partnerships

Answer 1

Proprietorships dominate business transactions based on the dollar value of sales. While the basic financial management concepts apply universally, the legal structure varies among proprietorships, partnerships, corporations, and limited liability entities. Understanding these structures is crucial for effective financial management. So, the correct answer is a) proprietorships.

Step-by-step explanation:

Basic concepts of financial management: Financial management principles, such as budgeting, investment decisions, and financial reporting, are fundamental to all businesses, providing a common foundation for effective financial practices.

Main forms of business organizations: Proprietorships, partnerships, corporations, and limited liability companies (LLCs) and limited liability partnerships (LLPs) offer different legal structures, each with its advantages and disadvantages.

However, the question is framed around the dollar value of sales, and traditionally, smaller businesses with a majority of proprietorships tend to make up the most significant portion of business transactions based on sales.

Therefore, the correct answer is a) Proprietorships.