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

In which type of business organization can creditors recover dues from the owner's personal assets?

Corporation

Cooperative society

Limited liability partnership (LLP)

Sole proprietorship

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Verified step by step guidance

Understand the concept of business organizations: Different types of business organizations have varying levels of liability for owners. Sole proprietorships, corporations, cooperative societies, and LLPs each have distinct legal structures.

Learn about sole proprietorships: In a sole proprietorship, the business and the owner are legally the same entity. This means the owner has unlimited liability, and creditors can recover dues from the owner's personal assets if the business cannot pay its debts.

Compare with other business types: Corporations, cooperative societies, and LLPs provide limited liability protection to their owners or members. This means creditors cannot typically access personal assets to recover business debts.

Focus on the key difference: The defining feature of a sole proprietorship is the lack of separation between the business and the owner's personal assets, making it unique in terms of liability exposure.

Conclude the reasoning: Based on the explanation, creditors can recover dues from the owner's personal assets only in a sole proprietorship, as other business types offer limited liability protection.