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

A disadvantage of forming a partnership is that owners:

cannot share profits and losses

have unlimited personal liability for the debts of the business

are required to pay corporate income tax

must issue shares to the public

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Verified step by step guidance

Step 1: Understand the concept of a partnership. A partnership is a business structure where two or more individuals share ownership, profits, and losses. It is distinct from corporations and sole proprietorships.

Step 2: Analyze the disadvantages of a partnership. One key disadvantage is that partners have unlimited personal liability for the debts of the business. This means that if the business cannot pay its debts, creditors can pursue the personal assets of the partners.

Step 3: Evaluate the incorrect options. For example, partnerships do not pay corporate income tax because they are not corporations; instead, profits are passed through to the partners and taxed as personal income. Similarly, partnerships do not issue shares to the public, as this is a characteristic of corporations.

Step 4: Clarify the sharing of profits and losses. In a partnership, owners typically share profits and losses according to the terms of their partnership agreement, so the statement 'cannot share profits and losses' is incorrect.

Step 5: Conclude that the correct disadvantage of forming a partnership is the unlimited personal liability for the debts of the business, which is a significant risk for the partners.