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

Jed wants to pass his sole proprietorship on to his son Luke in his will. Is it possible for him to do this?

Yes, a sole proprietorship can be transferred to anyone through a will just like corporate shares.

No, a sole proprietorship cannot be transferred through a will because it is legally inseparable from the owner.

Yes, but only if the business is first converted into a partnership.

No, but the business's debts can be transferred to Luke.

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Verified step by step guidance

Understand the nature of a sole proprietorship: A sole proprietorship is a business structure where the owner and the business are legally inseparable. This means the business does not exist as a separate legal entity from the owner.

Consider the implications of the owner's death: Since the sole proprietorship is inseparable from the owner, the business ceases to exist upon the owner's death. It cannot be directly transferred to another person through a will.

Evaluate the options for transferring the business: To pass the business to another person, the owner could consider converting the sole proprietorship into a different business structure, such as a partnership or corporation, which allows for transferability.

Understand the transfer of debts: While the sole proprietorship itself cannot be transferred, the business's debts and assets can be inherited by the designated heir, subject to legal and financial considerations.

Review the legal and financial planning steps: Jed should consult with a legal or financial advisor to explore options for restructuring the business or planning for the transfer of assets and liabilities to Luke in a way that aligns with his goals.