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 the main advantage of a sole proprietorship?

Double taxation of profits

Ability to raise large amounts of capital easily

Ease of start up

Limited liability for the owner

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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 structure.

Analyze the characteristics of a sole proprietorship: Key features include ease of startup, full control by the owner, and direct taxation of profits (no double taxation). However, it also comes with unlimited liability for the owner.

Evaluate the options provided in the question: Double taxation of profits is incorrect because sole proprietorships are taxed directly on the owner's personal income tax return, avoiding double taxation. Ability to raise large amounts of capital easily is incorrect because sole proprietorships often face challenges in raising capital due to limited resources and lack of access to equity markets.

Focus on the correct answer: Ease of startup is a primary advantage of sole proprietorships. They require minimal legal formalities and are straightforward to establish compared to other business structures.

Clarify the incorrect option of limited liability: Sole proprietorships do not offer limited liability; the owner is personally responsible for all debts and obligations of the business, which is a disadvantage rather than an advantage.