(a)
Forms of Organization
There are different types of business organization as per their nature of the formation. The following are the different types of organization:
Sole Proprietorship: An entity which is completely owned by a single person and that person is running the business solely is called sole proprietorship organization. Each and every decision of the organization is taken by the owner and is also responsible for all types of business risks.
Corporation: A business concern where there is a separate legal entity and are owned by shareholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. The liabilities of the corporation to its creditors is limited up to its available resources.
To identify: The form of business organization as per the given situations.
Corporation: A business concern where there is a separate legal entity and are owned by shareholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. The liabilities of the corporation to its creditors is limited up to its available resources.
To identify: The form of business organization as per the given situations.
(b)
Corporation: A business concern where there is a separate legal entity and are owned by shareholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. The liabilities of the corporation to its creditors is limited up to its available resources.
To identify: The form of business organization as per the given situations.
(c)
Sole Proprietorship: An entity which is completely owned by a single person and that person is running the business solely is called sole proprietorship organization. Each and every decision of the organization is taken by the owner and is also responsible for all types of business risks.
To identify: The form of business organization as per the given situations.
(d)
Sole Proprietorship: An entity which is completely owned by a single person and that person is running the business solely is called sole proprietorship organization. Each and every decision of the organization is taken by the owner and is also responsible for all types of business risks.
Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to establish and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of company, individuals with similar interest join together and startup a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.
To identify: The form of business organization as per the given situations.
(e)
Corporation: A business concern where there is a separate legal entity and are owned by shareholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. The liabilities of the corporation to its creditors is limited up to its available resources.
To identify: The form of business organization as per the given situations.
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Chapter 1 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
- What are some of the reasons a business owner might choose the corporate form of business?arrow_forwardWhich of the following sets of characteristics can be attributed to a company? 1. Difficulty raising funds, owners have full control. 2. Separate legal entity and owners have limited liability. 3. Owners have shared control and unlimited liability. 4. Simple to set up and mutual agency.arrow_forwardWhich of the following accounting concepts considers the investment made by the owner in the business as the liability of the business? a.Dual aspect concept , b.Money measurement concept , c.Business entity concept , d.Going concern conceptarrow_forward
- A concept of accounting that indicates that the financial records of the business should be kept separate from the personal financial records of the business owner is the ________________________. Group of answer choices business entity concept cost concept proprietorship concept asset conceptarrow_forwardCompare and contrast the three major forms of business organization which are sole proprietorship, partnership and corporation. Also, relate the scope of the role of a financial manager within these business organization.arrow_forwardWhich function of a financial intermediary reduces transaction and information costs between a corporation and individual which may encourage a higher rate of savings? Select one: a. Administration of the payments mechanism b. Information production services. c. Money supply management. d. Asset transformation services. e. Brokerage services.arrow_forward
- How can an individual who is thinking of going into business evaluate the financial picture of the enterprise?arrow_forwardThe corporation is the most effective form of business organization because the corporation has: Select one: a) easier access to financial capital through selling bonds and stocks b) an unlimited liability toward the stock owners c) the problem of double taxation with respect to the corporate income d) a lot of skilled and semi-skilled labourers e) more freedom of action with respect to managementarrow_forwardWhich of the following statements is true regarding business plans:   A. A corporation is the only legal form of business ownership that should develop a business plan.  B. The operating plan details information regarding the business's services.  C. Owners often use business plans as a tool to help them achieve their objectives.  D. Lending institutions do not usually require loan applicants to submit a business plan.arrow_forward
- please answer correct in detail Identify each of the following characteristics as being an advantage or a disadvantage of the corporate form of business or not applicable to the corporate form of business organization. 4. Unlimited liability of owners  5. Government regulations  6. Seperation of ownership and managementarrow_forwardIn order to run a business, operations must be funded from day to day. In order to fund their ventures, many business owners turn to investors to help financially. What is the resulting investment called?  a) Capital  b) Corporate dividends  c) Expenses  d) Revenuearrow_forwardplease answer correct in detail Identify each of the following characteristics as being an advantage or a disadvantage of the corporate form of business or not applicable to the corporate form of business organization. 7. Ability to acquire capital  8. Ease of transfer of ownershiparrow_forward
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning