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 main advantage of organizing a firm as a corporation?

Ownership is difficult to transfer

Limited liability for shareholders

Profits are taxed only once at the individual level

The corporation dissolves automatically upon the death of an owner

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Verified step by step guidance

Understand the concept of a corporation: A corporation is a legal entity that is separate from its owners, providing certain advantages and disadvantages compared to other business structures like sole proprietorships or partnerships.

Review the key characteristics of corporations: Corporations offer limited liability to shareholders, meaning the personal assets of shareholders are protected from the corporation's debts and legal obligations. This is a significant advantage.

Analyze the options provided in the question: Evaluate each statement to determine which aligns with the advantages of a corporation. For example, 'Ownership is difficult to transfer' is incorrect because corporations typically allow easy transfer of ownership through the sale of shares.

Focus on 'Limited liability for shareholders': This is a primary advantage of corporations, as it protects shareholders from being personally liable for the company's debts beyond their investment in shares.

Eliminate incorrect options: 'Profits are taxed only once at the individual level' is incorrect because corporations face double taxation (profits are taxed at the corporate level and dividends at the individual level). 'The corporation dissolves automatically upon the death of an owner' is also incorrect because corporations have perpetual existence, meaning they do not dissolve upon an owner's death.