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

What usually happens to a business when its sole proprietor dies?

The business legally ceases to exist.

The business automatically becomes a corporation.

Ownership is automatically transferred to the government.

The business continues to operate under the same name indefinitely.

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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 not legally separate from its owner, meaning the owner and the business are considered the same entity for legal and tax purposes.

Recognize the legal implications of the owner's death: Since the sole proprietorship is tied directly to the owner, the business does not have a separate legal existence. When the owner dies, the business ceases to exist legally.

Clarify why the business does not automatically become a corporation: A corporation is a separate legal entity that requires formal registration and specific legal processes to establish. A sole proprietorship cannot transform into a corporation automatically upon the owner's death.

Explain why ownership is not transferred to the government: Ownership of the business assets may pass to the deceased owner's heirs or estate, but the government does not automatically take ownership of the business.

Highlight why the business cannot continue indefinitely under the same name: Without the legal existence of the sole proprietor, the business cannot operate under the same name unless the heirs or estate decide to establish a new business entity.