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

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following is a disadvantage associated with Subchapter S corporations?

Profits are taxed twice, once at the corporate level and again at the shareholder level.

S corporations can issue multiple classes of stock to attract investors.

There are no restrictions on the types of shareholders allowed.

Shareholders are limited in number, restricting potential for raising capital.

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Verified step by step guidance

Understand the concept of Subchapter S corporations: These are a type of corporation that allows income, deductions, and tax credits to pass through to shareholders, avoiding double taxation.

Review the advantages of Subchapter S corporations: They avoid double taxation, have limited liability for shareholders, and allow profits and losses to be passed directly to shareholders.

Identify the disadvantages of Subchapter S corporations: One key disadvantage is the limitation on the number of shareholders, which restricts the corporation's ability to raise capital effectively.

Analyze the options provided in the question: Eliminate incorrect statements such as 'Profits are taxed twice' (this applies to C corporations, not S corporations), and 'S corporations can issue multiple classes of stock' (S corporations are restricted to one class of stock).

Conclude that the correct disadvantage is 'Shareholders are limited in number, restricting potential for raising capital,' as this aligns with the restrictions imposed on Subchapter S corporations.