The first one is proprietorship which is owned by a single owner. This type of entity is the smallest and simplest one among the different types of entities. Proprietorship is an entity owned by a single owner. The owner of proprietorship is called as proprietor and his or her equity can be seen as only one item in owner’s equity section of the balance sheet.

Proprietor is the owner of a sole proprietorship. The expiration of a proprietorship is caused either by the proprietor’s death or his/her choice of ending it. Also, the proprietor is personally liable for the proprietorship’s liabilities. However, the accounting process of the proprietorship is separate from the personal records of the proprietor. Another important characteristic is about taxation.

A proprietorship is not a separate taxable entity. The proprietor pays tax on the income of proprietorship. The correct answer is D.