Which row correctly identifies an advantage and a disadvantage of operating as a sole trader?OptionAdvantageDisadvantageAFinancial statements must be publishedComplete control over business operationsBEasy to set upNo one to share workload withCSeparate legal identityLimited opportunities to increase capitalDUnlimited liability for business debtsNo one to share ideas with

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SSC Financial and Cost Accounting P-1 QUESTION #6098

Question 1

Which row correctly identifies an advantage and a disadvantage of operating as a sole trader?

Option	Advantage	Disadvantage
A	Financial statements must be published	Complete control over business operations
B	Easy to set up	No one to share workload with
C	Separate legal identity	Limited opportunities to increase capital
D	Unlimited liability for business debts	No one to share ideas with

Correct Answer Explanation

Option B is correct.

A key advantage of a sole trader is that it is easy to set up. A key disadvantage is no one to share the workload.

A: Sole traders are NOT required to publish financial statements. Complete control is an advantage, not a disadvantage.
C: Separate legal identity belongs to limited companies.
D: Unlimited liability is a disadvantage, not an advantage.