Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Business Organization

Financial Accounting

1. Introduction to Accounting

Business Organization

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Multiple Choice

Which of the following is a primary advantage of choosing a sole proprietorship as a form of business organization?

Ease of transferring ownership

Ability to raise large amounts of capital easily

Simple and inexpensive to establish

Limited personal liability for business debts

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Verified step by step guidance

Understand the concept of a sole proprietorship: A sole proprietorship is a business owned and operated by one individual. It is the simplest and most common form of business organization.

Analyze the advantages of a sole proprietorship: The primary advantage is that it is simple and inexpensive to establish. This means there are minimal legal and administrative requirements compared to other business structures like corporations or partnerships.

Evaluate the other options provided: 'Ease of transferring ownership' is not a characteristic of sole proprietorships because ownership is tied to the individual owner. 'Ability to raise large amounts of capital easily' is also not applicable, as sole proprietorships often face challenges in raising significant capital due to limited resources and lack of access to equity markets.

Understand the concept of liability: Sole proprietorships do not offer limited personal liability for business debts. The owner is personally responsible for all liabilities, which is a disadvantage compared to other structures like corporations.

Conclude why 'Simple and inexpensive to establish' is the correct answer: This aligns with the defining characteristics of a sole proprietorship, making it the most accurate choice among the options provided.