Question detail
BrightBake serves business clients while changing promotion; the case evidence includes supplier lead time of ?2,174, sales of 974 units, and a 17% change in costs or demand. Which option best applies Explain limited liability and identify which legal structures benefit from it?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Business ownership
Question
- A. Use limited liability to judge unit contribution, lenders impact, and the business objective in Benefits, drawbacks and suitability.
- B. Give only a definition of Business ownership without using the case evidence.
- C. Treat efficiency and productivity as identical and ignore the effect on lenders.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use limited liability to judge unit contribution, lenders impact, and the business objective in Benefits, drawbacks and suitability.
Explanation
This option works because Use limited liability to judge unit contribution, lenders impact, and the business objective in Benefits, drawbacks and suitability. The case evidence gives ?3,674, 974 units, and 17%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse efficiency and productivity, miss the lenders, or ignore the business objective.
Common mistake
Benefits, drawbacks and suitability common mistake 1
Giving a vague answer instead of directly addressing: Explain limited liability and identify which legal structures benefit from it..
Answer by clearly explaining how to explain limited liability and identify which legal structures benefit from it..
Related flashcards
Flashcard 1 of 5
Related practice questions
Question 1 of 5
Choose an answer, get feedback, then move sideways through the set.