.Which of the following is NOT an advantage of being a sole proprietorship?Individual Income Tax Return.A sole proprietorship has no separate annual tax return for the business, it is part of Form 1040, U.S. A sole proprietor has full control of all aspects of the business, from which work to take to purchases that are made.A sole proprietorship is a pass-through entity.A sole proprietorship is very easy and inexpensive to begin.Mark for follow upUnder the general valuation rules, the value of a fringe benefit is the:Amount actually paid by the employer for the benefit.Amount the employee considers to be the value of the benefit.Fair market value of the benefit.The lower of A, B, or C.Mark for follow upSole proprietorships must use the ________ as their tax year.Calendar tax year.Fiscal tax year.Hybrid tax year.52-53 week tax year.Mark for follow up.In which accounting method is income reported in the tax period that it’s received and expenses are reported in the tax period that they are paid?Accrual method.Cash method.Fiscal method.Hybrid method.Mark for follow upIf a sole proprietor does not have books or records, you should:Refuse to prepare the return because the IRS only allows you to accept income and expenses that are documented.Ask them to tell you everything they can remember and use only that information to prepare the return.Help them reconstruct their income and expenses using business records like bank statements, cell phone records, and appointment books.Advise them on ways to get the information themselves, but not help them do the reconstruction because that’s a conflict of interest.A sole proprietor is able to reduce their income by ________.Any expenses that they incurred in their business.Only expenses that are ordinary and necessary in their type of business.All expenses paid for with a business credit card or account.Only expenses that they can prove with a receipt.Mark for follow upLawSocial ScienceTax law MKT 401
