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JAMB Economics 2001 Question 29

Question 29

Business Organisations

The losses suffered by a sole proprietor are

  1. A.usually equal to the amount invested
  2. B.usually less than the amount invested
  3. C.limited to the amount invested
  4. D.not limited to the amount invested
Show the answer and explanation

Answer: D (not limited to the amount invested)

Explanation

A sole proprietor has unlimited liability, so his personal property can be taken to pay the business's debts.