Assertion (A): Sole proprietors have unlimited personal liability for the business debts.

Reason (R): Personal assets of the owner may be used to settle business obligations in case of financial difficulties.

1. A is true but R is false.
2. A is false but R is true.
3. Both A and R are true and R explains A.
4. Both A and R are true but R does not explain A.

In a sole proprietorship, the business and the owner are considered …………… .

1. Two separate legal entities
2. A single legal entity
3. Governed by different laws
4. Managed under a partnership deed

In a sole proprietorship, decisions can be made ……………, whereas in a joint Hindu family business, decisions are made by …………… .

1. By consensus; family members jointly
2. Independently; the karta
3. By majority vote; external consultants
4. By board meetings; coparceners

The Sharma family runs a successful spice business that has been operating for generations. Customers trust their products because of the business's long-standing reputation. Which advantage of joint Hindu family business is illustrated in this case?

1. Incentive to work hard
2. Ancestral goodwill
3. Ease of formation
4. Quick decisions