State whether the given statement is true or false.
Answer to Problem 1TF
The given statement “When two or more individuals engage in an enterprise as co-owners, the organization is known as a proprietorship” is false.
Explanation of Solution
A partnership is an unincorporated form of business which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves.
“When two or more individuals engage in an enterprise as co-owners, the organization is known as a partnership”. It is a form of organization which is common to all types of enterprises. However, this form of organization is prevalent in personal service enterprises rather than merchandising businesses.
Therefore, from the above explanation, the given statement “When two or more individuals engage in an enterprise as co-owners, the organization is known as a proprietorship” is false.
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Chapter 19 Solutions
College Accounting, Chapters 1-15
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