Concept Introduction:
Forms of business organization: A business can be started in any form of business organization. The form of business organization can be a sole proprietorship, a general partnership, a limited partnership, a limited liability partnership, S corporation, a corporation or a limited liability company.
To choose:
The correct type of the organization
Answer to Problem 1SEQ
D. Corporation
Explanation of Solution
Explanation for correct answer:
A Corporation has a separate legal entity and its owners own shares in its capital. Hence the correct answer is D.
Explanation for incorrect answers:
A. A proprietorship does not have a separate legal entity. Hence this option is not correct.
B. A service business does not necessarily have a separate legal entity. Hence this option is not correct.
C. A partnership does not have a separate legal entity. Hence this option is not correct.
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Chapter 1 Solutions
Survey Of Accounting (custom Ed. For Univ Of Oregon)
- Chelsea Company is a sole proprietorship. Ashley, Incorporated is a corporation. Which company would report stockholders equity and retained earnings and not simply owners equity? Why? What is the difference between these accounts?arrow_forwardAs used in the definition of accounting, an economic entity may be a. a business enterprise b. an individual c. a division within a business enterprise d. all of the above e. none of the above EXPLAINarrow_forwardDiscuss the different types of business structures and compare and contrast these different structures (Corporate, Sole Proprietorship, Limited Liability),arrow_forward
- ⦁ Explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.⦁ How do dividends affect owners’ equity? Are they treated as a business expense? Explainarrow_forwardWhich type of business organization is owned by only one owner? a. Corporation b. Partnership c. Sole proprietorship d. Items a, b, and c are all correct.arrow_forwardDistinguish between corporations and sole proprietorshipsin terms of the following characteristics:a. Owners’ liability for debts of the business.b. Transferability of ownership interest.c. Continuity of existence.d. Federal taxation on income.arrow_forward
- In each case below, I have given a goal that a business might have. What you need to do is to indicate for each whether the goal can better be achieved if the business is organized as a sole proprietorship or as a corporation. goal: to minimize taxes on profits of the business goal: the ability to freely transfer ownership interests in the businessarrow_forwardThe following describe several different business organizations. Determine whether each description bestrefers to a sole proprietorship (SP), partnership (P), corporation (C), or limited liability company (LLC). AJ Company pays a business income tax and has two owners.arrow_forwardThe following describe several different business organizations. Determine whether each description best refers to a sole proprietorship (SP), partnership (P), corporation (C), or limited liability company (LLC).arrow_forward
- Characteristics of a corporation include a.shareholders who are mutual agents b.direct management by the shareholders (owners) c.shareholders who have limited liability d.its inability to own propertyarrow_forwardIdentify one advantage of corporate form of business over a proprietorshiparrow_forwardSetting up a business as a corporation has the following benefits a) Separation of ownership and management b) Easier to raise capital c) Limited liability d) Easier to expand business e) All of the abovearrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College