Essay Type Questions Advantages Of Sole

Business: Sole Proprietorship Essay

Sole Proprietorship

A sole proprietorship is a business owned and controlled by a single individual. There are more sole proprietorships than any other type of business available (Lau, 2011). It is a simple type of business to set up, as well as simple to terminate. The proprietor has the freedom to determine operating hours, what services or goods to provide, where it operates, and what contracts to enter into without needed to consult another party. With full control, however, comes full liability. A proprietor is personally liable for all financial obligations whether they be debts from company operations or restitution ordered to be paid from third party suits. It can also be difficult to secure financing for a sole proprietorship as banks look at the business as an individual. Often, banks will treat loans to proprietorships as personal loans to the proprietor and require collateral.

Liability. All liability rests with the owner of the sole proprietorship. This can put the proprietor in a very difficult position if an individual were to sue the business. The courts consider the proprietor and proprietorship as one so when the business is sued, they are essentially suing the proprietor. All the proprietor’s personal assets such as their house, car, retirement account, and bank account are at risk. Debts the business is unable to cover must also transfer to the proprietor.
Income tax. The proprietor and their business are seen as a single individual by the government. As such, they are taxed together, once, as personal income tax. All profits gained through the sole proprietorship are direct income for the proprietor and are taxed as such. Any business expenses or losses can be deducted from their personal income total.
Longevity. While a proprietorship can be sold, it typically lives and dies with the proprietor. Other arrangements would need to be made ahead of time if the proprietor wishes the business to continue on without them. If the proprietor wishes to dissolve the company, they can do so by fulfilling any outstanding obligations the business has made.
Control. Ultimately, a sole proprietorship is controlled entirely by its creator. They may choose to hire an individual to manage their company, but the proprietor has final say in all decisions (Stevick Jr., 2006). No other individual may override the proprietor as long as they are operating within the law.
Profit Retention. All profits for a sole proprietorship are direct income for the proprietor with no profit sharing needed. Since no other individual can lay claim to the profits, the proprietor has the potential to regain their full initial investment quickly. The amount of profit earned depends entirely on the success of the business.
Location / Expansion. A proprietorship can be moved to another location without any permission and can change in any way the proprietor wishes within legal constraints. If the proprietorship wishes to operate in a new state, new...

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It’s good to regularly review the advantages and disadvantages of the most commonly used test questions and the test banks that now frequently provide them.

Multiple-choice questions


  • Quick and easy to score, by hand or electronically
  • Can be written so that they test a wide range of higher-order thinking skills
  • Can cover lots of content areas on a single exam and still be answered in a class period


  • Often test literacy skills: “if the student reads the question carefully, the answer is easy to recognize even if the student knows little about the subject” (p. 194)
  • Provide unprepared students the opportunity to guess, and with guesses that are right, they get credit for things they don’t know
  • Expose students to misinformation that can influence subsequent thinking about the content
  • Take time and skill to construct (especially good questions)

True-false questions



  • Considered to be “one of the most unreliable forms of assessment” (p. 195)
  • Often written so that most of the statement is true save one small, often trivial bit of information that then makes the whole statement untrue
  • Encourage guessing, and reward for correct guesses

Short-answer questions


  • Quick and easy to grade
  • Quick and easy to write


  • Encourage students to memorize terms and details, so that their understanding of the content remains superficial

Essay questions


  • Offer students an opportunity to demonstrate knowledge, skills, and abilities in a variety of ways
  • Can be used to develop student writing skills, particularly the ability to formulate arguments supported with reasoning and evidence


  • Require extensive time to grade
  • Encourage use of subjective criteria when assessing answers
  • If used in class, necessitate quick composition without time for planning or revision, which can result in poor-quality writing

Questions provided by test banks


  • Save instructors the time and energy involved in writing test questions
  • Use the terms and methods that are used in the book


  • Rarely involve analysis, synthesis, application, or evaluation (cross-discipline research documents that approximately 85 percent of the questions in test banks test recall)
  • Limit the scope of the exam to text content; if used extensively, may lead students to conclude that the material covered in class is unimportant and irrelevant

We tend to think that these are the only test question options, but there are some interesting variations. The article that promoted this review proposes one: Start with a question, and revise it until it can be answered with one word or a short phrase. Do not list any answer options for that single question, but attach to the exam an alphabetized list of answers. Students select answers from that list. Some of the answers provided may be used more than once, some may not be used, and there are more answers listed than questions. It’s a ratcheted-up version of matching. The approach makes the test more challenging and decreases the chance of getting an answer correct by guessing.

Remember, students do need to be introduced to any new or altered question format before they encounter it on an exam.

Editor’s note: The list of advantages and disadvantages comes in part from the article referenced here. It also cites research evidence relevant to some of these advantages and disadvantages.

Reference: McAllister, D., and Guidice, R.M. (2012). This is only a test: A machine-graded improvement to the multiple-choice and true-false examination. Teaching in Higher Education, 17 (2), 193-207.

Reprinted from The Teaching Professor, 28.3 (2014): 8. © Magna Publications. All rights reserved.

Posted in Educational Assessment
Tagged with assessing student learning, designing test questions, grading strategies, multiple-choice tests, test questions


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