FUNDAMENTALS OF FINANCIAL ACCOUNTING
FUNDAMENTALS OF FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781259684234
Author: PHILLIPS
Publisher: MCG/CREATE
Question
Chapter 1, Problem 2Q
To determine

Explain the advantages and disadvantages of operating a sole proprietorship versus a corporation.

Blurred answer
Students have asked these similar questions
Valeri is opening a hair salon, but she does not know whatbusiness form it should take. What can you tell her aboutthe advantages and disadvantages of operating as a soleproprietorship versus a corporation?
Sebastian, Wyatt, and Mathew are close friends who graduated with master's degrees in accounting from an Ivy League institution. Instead of seeking employment, the friends decided to create their own accounting business.   At their initial meeting, the friends could not decide whether to form a partnership or a limited liability company. You were approached as a company law student for advice on the type of business that would be appropriate for the friends.   (a) What kind of business would you suggest to the friends? Justify your recommendation. Your reasoning should not be more than 500 words and should cover the following points:  the requirement for the registration of the business in Jamaica, the advantages and disadvantages of the business type and information on the dissolution of the business.                                    (b) Assume the friends opted to create a partnership, and has asked for your assistance in creating a Partnership deed; create a partnership deed that…
Three ladies decide to go into business publishing cookbooks. They form a corporation, having been told that the corporate form of ownership carries limited liability. They decide not to purchase any form of liability insurance for the corporation because their loss in the event of an uninsured liability loss will be limited to the amount of their initial investment. Is there a fallacy in their logic?

Chapter 1 Solutions

FUNDAMENTALS OF FINANCIAL ACCOUNTING

Ch. 1 - Describe the basic accounting equation that...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Briefly define what an ethical dilemma is and...Ch. 1 - Prob. 18QCh. 1 - Prob. 1MCCh. 1 - Which of the following is true regarding the...Ch. 1 - Which of the following is false regarding the...Ch. 1 - Which of the following regarding retained earnings...Ch. 1 - Prob. 5MCCh. 1 - Which of the following statements regarding the...Ch. 1 - Prob. 7MCCh. 1 - Which of the following is true? a. FASB creates...Ch. 1 - Which of the following would not be a goal of...Ch. 1 - Prob. 10MCCh. 1 - Prob. 1MECh. 1 - Matching Definitions with Terms or Abbreviations...Ch. 1 - Matching Definitions with Terms Match each...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to the Basic...Ch. 1 - Matching Financial Statement Items to the Four...Ch. 1 - Reporting Amounts on the Statement of Cash Flows...Ch. 1 - Prob. 11MECh. 1 - Preparing a Statement of Retained Earnings Stone...Ch. 1 - Relationships among Financial Statements Items...Ch. 1 - Prob. 14MECh. 1 - Relationships among Financial Statements Items...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Preparing a Balance Sheet DSW, Inc., is a designer...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Labeling and Classifying Business Transactions The...Ch. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Preparing an Income Statement Home Realty,...Ch. 1 - Prob. 8ECh. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Analyzing and Interpreting an Income Statement...Ch. 1 - Prob. 11ECh. 1 - Matching Cash Flow Statement Items to Business...Ch. 1 - Preparing an Income Statement. Statement of...Ch. 1 - Interpreting the Financial Statements Refer to...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to CP1-3....Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Prob. 2PACh. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PA1-3....Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Interpreting the Financial Statements Refer to PB...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PB1-3....Ch. 1 - Finding Financial Information Answer the following...Ch. 1 - Comparing Financial Information Refer to the...Ch. 1 - Prob. 5SDCCh. 1 - Prob. 6SDCCh. 1 - Prob. 1CC
Knowledge Booster
Similar questions
  • Margie and her sister, Jan, each own half of the shares of a closely held business. Margie is concerned about what will happen to the business if Jan dies because Jean just married a man who Margie cannot stand. Jan is also concerned because, although Margie is currently single, she has children from a prior marriage who Jan feels are spendthrifts. Neither sister is ready to quit the business and retire. Neither sister is financially able to pay a gift tax or a capital gains tax. Which one of the following is the most appropriate business transfer technique for Margie and Jan to use in this situation?     A) A private annuity agreement between the two sisters     B) A cross-purchase buy-sell agreement between the two sisters     C) An installment sale contract between the two sisters     D) A preferred stock recapitalization of the business
    Nicholas is a software engineer and is starting a consulting practice. What form of businessorganization limits his liability to the amount he has invested in the business?a. Proprietorshipb. Partnershipc. Corporationd. None of the above
    In one of the following situations, the member acted properly. Which one? Group of answer choices a. Joe was providing consulting services to client Lowery Company and in that capacity learned trade secrets that he used to convince Richter Corporation to hire him as a consultant who could help Richter compete against Lowery. b. Fiona prepared a joint tax return for Tom and Pam, a married couple. When Tom and Pam got into a vicious divorce proceeding, Fiona helped Pam, whom she perceived to be the wronged party, and refused to share any information with Tom, whom she thought was a bad husband. c. Han prepared corporate income tax returns for Nadle Corporation until he became uncomfortable with how aggressive in seeking deductions Nadle was asking him to be. He“fired” Nadle as a client. When Nadle sought to replace Han with Jennifer, she called Han and asked: “What can you tell me about Nadle?” Han replied: “Well, I think you should ask Nadle to grant me permission to speak…
  • WHAT KIND OF BUSINESS IS THIS? After graduating from college, Shelley Williams held several different jobs but found that she did not enjoy working for other people. Finally, she and Yvonne Hargrove, her college roommate, decided to start a business of their own. They rented a small building and opened a florist shop selling cut flowers such as roses and chrysanthemums that they bought from a local greenhouse. Williams and Hargrove agreed orally to share profits and losses equally, although they also decided to take no money from the operation for at least four months. No other arrangements were made, but the business did reasonably well, and after the first four months had passed, each began to draw out $500 in cash every week. At year-end, they took their financial records to a local accountant so that they could get their income tax returns completed. He informed them that they had been operating as a partnership and that they should draw up formal articles of partnership agreement…
    WHAT KIND OF BUSINESS IS THIS? After graduating from college, Shelley Williams held several different jobs but found that she did not enjoy working for other people. Finally, she and Yvonne Hargrove, her college roommate, decided to start a business of their own. They rented a small building and opened a florist shop selling cut flowers such as roses and chrysanthemums that they bought from a local greenhouse. Williams and Hargrove agreed orally to share profits and losses equally, although they also decided to take no money from the operation for at least four months. No other arrangements were made, but the business did reasonably well, and after the first four months had passed, each began to draw out $500 in cash every week. At year-end, they took their financial records to a local accountant so that they could get their income tax returns completed. He informed them that they had been operating as a partnership and that they should draw up formal articles of partnership agreement…
    Linda operates an illegal gambling operation. Which of the following expenses that she incurs can reduce taxable income? a. Bribes paid to city employees. b. Salaries to employees. c. Security cameras. d. Kickbacks to police. e. Rent on an office. f. Depreciation on office furniture and equipment. g. Tenants casualty insurance. h. Utilities.
    Recommended textbooks for you
  • Intermediate Financial Management (MindTap Course...
    Finance
    ISBN:9781337395083
    Author:Eugene F. Brigham, Phillip R. Daves
    Publisher:Cengage Learning
    Business Its Legal Ethical & Global Environment
    Accounting
    ISBN:9781305224414
    Author:JENNINGS
    Publisher:Cengage
    CONCEPTS IN FED.TAX., 2020-W/ACCESS
    Accounting
    ISBN:9780357110362
    Author:Murphy
    Publisher:CENGAGE L
  • SWFT Corp Partner Estates Trusts
    Accounting
    ISBN:9780357161548
    Author:Raabe
    Publisher:Cengage
    SWFT Comprehensive Vol 2020
    Accounting
    ISBN:9780357391723
    Author:Maloney
    Publisher:Cengage
    SWFT Comprehensive Volume 2019
    Accounting
    ISBN:9780357233306
    Author:Maloney
    Publisher:Cengage
  • Intermediate Financial Management (MindTap Course...
    Finance
    ISBN:9781337395083
    Author:Eugene F. Brigham, Phillip R. Daves
    Publisher:Cengage Learning
    Business Its Legal Ethical & Global Environment
    Accounting
    ISBN:9781305224414
    Author:JENNINGS
    Publisher:Cengage
    CONCEPTS IN FED.TAX., 2020-W/ACCESS
    Accounting
    ISBN:9780357110362
    Author:Murphy
    Publisher:CENGAGE L
    SWFT Corp Partner Estates Trusts
    Accounting
    ISBN:9780357161548
    Author:Raabe
    Publisher:Cengage
    SWFT Comprehensive Vol 2020
    Accounting
    ISBN:9780357391723
    Author:Maloney
    Publisher:Cengage
    SWFT Comprehensive Volume 2019
    Accounting
    ISBN:9780357233306
    Author:Maloney
    Publisher:Cengage