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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is a disadvantage of corporations as a form of business ownership?

Unlimited liability for owners

Limited ability to raise capital

Lack of continuity in existence

Double taxation of corporate earnings

Previous problemNext problem

Verified step by step guidance

Understand the concept of a corporation: A corporation is a legal entity that is separate from its owners (shareholders). It offers limited liability to its owners, meaning they are not personally responsible for the corporation's debts.

Review the advantages of corporations: Corporations have the ability to raise capital by issuing shares, continuity of existence regardless of changes in ownership, and limited liability for owners.

Identify the disadvantages of corporations: One major disadvantage is double taxation. Corporations pay taxes on their earnings, and when these earnings are distributed as dividends to shareholders, the shareholders also pay taxes on the dividends.

Compare the options provided in the question: Unlimited liability for owners applies to sole proprietorships and partnerships, not corporations. Limited ability to raise capital is not true for corporations, as they can issue shares. Lack of continuity in existence applies to sole proprietorships, not corporations.

Conclude that the correct answer is double taxation of corporate earnings, as this is a unique disadvantage of corporations compared to other forms of business ownership.