Question

A sole proprietor exchanges an office building used in her business for undeveloped land she plans to hold for investment purposes.

1) True
2) False

Answer 1

The statement is false because the exchange of an office building used in a sole proprietorship's business is not considered a personal investment.

Step-by-step explanation:

A sole proprietor exchanges an office building used in her business for undeveloped land she plans to hold for investment purposes. This statement is False. According to the definition of a sole proprietorship, the owner is responsible for all debts and liabilities of the business. If the office building was used in her business, it would be considered an asset of the business and not considered a personal investment.