Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 1, Problem 12EA
To determine
State the various groups of entities that are interested in the financial statements of A. Differentiate between a corporation and a
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Riki and Sarah, are the owners of Hello Fish Restaurant, a general partnership. What are the chief characteristics, advantages, and disadvantages of this form of business organization? Give an example of how there could be liability for one or both partners based on something that could happen at the restaurant. What organizational structure do you suggest they should form in place of the partnership?
Businesses can be classified into the following forms: sole proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP).
Different forms of businesses have different characteristics. Which of the following characteristics would apply to a limited liability company and a limited liability partnership? Check all that apply.
LLPs are not suitable for professional firms such as accounting, law, and architecture
Limited financial liability
Taxed as a partnership
Have corporate ownership structure
Owned by single individual
Owners have limited liability and right to vote
Which of the following statements is most true?
a. The liability for other partners’ wrong doings is limited to the amount a particular partner has invested in the partnership.
b. Partnerships are formed in accordance with specific guidelines that include the filing of a formal written agreement to the government.
c. A fast growing firm would be more probable to establish a partnership as its business form than would a slow growing firm.
d.Corporations can easier attract investors than those of the partnership and sole proprietor businesses.
Chapter 1 Solutions
Principles of Accounting
Ch. 1 - What makes accounting a valuable discipline?Ch. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - How are expenses and withdrawals similar, and how...Ch. 1 - How do generally accepted accounting principles...Ch. 1 - Why do managers in governmental and not-for-profit...Ch. 1 - Prob. 1SECh. 1 - Match the descriptions that follow with the...Ch. 1 - Determine the amount missing from each accounting...Ch. 1 - Use the accounting equation to answer each...
Ch. 1 - Use the accounting equation to answer each...Ch. 1 - Prob. 6SECh. 1 - Use the following accounts and balances to prepare...Ch. 1 - Randall Company engaged in activities during the...Ch. 1 - Prob. 9SECh. 1 - Prob. 10SECh. 1 - Prob. 1EACh. 1 - Financial accounting uses money measures to gauge...Ch. 1 - You have been asked to compare the sales and...Ch. 1 - Use the accounting equation to answer each...Ch. 1 - Daiichi Companys total assets and liabilities at...Ch. 1 - 1. Indicate whether each of the following accounts...Ch. 1 - Listed in random order are some of Oxford Services...Ch. 1 - Dukakis Company had the following accounts and...Ch. 1 - Prob. 9EACh. 1 - Prob. 10EACh. 1 - Complete the financial statements that follow by...Ch. 1 - Prob. 12EACh. 1 - Match the terms that follow with the appropriate...Ch. 1 - Prob. 14EACh. 1 - Prob. 15EACh. 1 - Prob. 1PCh. 1 - The following three independent sets of financial...Ch. 1 - Fuel Designs financial accounts follow. The...Ch. 1 - The accounts of Frequent Ad, an agency that...Ch. 1 - Athena Riding Clubs financial statements follow.Ch. 1 - A list of financial statement items follows....Ch. 1 - Three independent sets of financial statements...Ch. 1 - Prob. 8APCh. 1 - Prob. 9APCh. 1 - Aqua Swimming Clubs financial statements follow....Ch. 1 - Costco Wholesale Corporation is Americas largest...Ch. 1 - Prob. 2CCh. 1 - Prob. 3CCh. 1 - Prob. 4CCh. 1 - Refer to the CVS annual report and the financial...
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- Which of the following statements is CORRECT? a. A major disadvantage of all partnerships compared to all corporations is the fact that federal income taxes must be paid by the partners rather than by the firm itself. b. A slow-growth company, with little need for new capital, would be more likely to organize as a corporation than would a faster growing company. c. Attracting large amounts of capital is more difficult for partnerships than for corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity (difficulty buying and selling) of partnership interests. d. In a regular partnership, liability for other partners' misdeeds is limited to the amount of a particular partner's investment in the business. e. The limited partners in a limited partnership have voting control, while the general partner has operating control over the business. Also, the limited…arrow_forwardWhich of the following is a reason to use a partnership as the legal form of a business? A. Partnerships avoid the difficulty of raising capital. B. Partnerships avoid the issue of mutual agency. C. Partnerships avoid the issue of double-taxation faced by corporations. D. Partnerships avoid the issue of unlimited liability.arrow_forwardEthics in Action Edward Seymour is a financial consultant to cornish Inc, Areal estate syndicate, Cornish finances and develops commercial real estate(office buildings) projects. The completed projects are then sold as limited partnership interests to individual investors. The syndicate makes a profit on the sale of these partnership interests. Edward provides financial information for prospective investors in a document called the offering "prospectus" This document discusses the financial and legal details of the limited partnership investment. one of the company's current projects, called JEDI 2, Has the partnership borrowing money from a local bank to build a commercial office building. The inerest rate on the loan is 6.5% for the first four years. After four years. The interest rate jumps to 15% for the remaining 20years of the loan The intrest expense is one of the major costs of this project and significantly affects the number of reenters needed for the project to break even,…arrow_forward
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