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

How does a corporation differ from a sole proprietorship?

A corporation is a separate legal entity from its owners, while a sole proprietorship is not.

A corporation is always managed by a single individual, while a sole proprietorship is managed by a board of directors.

Corporations have unlimited liability, whereas sole proprietors have limited liability.

A sole proprietorship can issue shares of stock, but a corporation cannot.

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Verified step by step guidance

Understand the key differences between a corporation and a sole proprietorship. A corporation is a separate legal entity from its owners, meaning it has its own legal rights and obligations, whereas a sole proprietorship is not legally distinct from its owner.

Recognize the management structure differences. A corporation is typically managed by a board of directors and may have multiple individuals involved in decision-making, while a sole proprietorship is managed by a single individual who owns the business.

Clarify the liability aspect. Corporations generally offer limited liability to their owners, meaning the owners' personal assets are protected from business debts. In contrast, sole proprietors have unlimited liability, meaning their personal assets can be used to cover business debts.

Understand the ability to issue shares of stock. Corporations can issue shares of stock to raise capital, which allows them to bring in investors. Sole proprietorships, on the other hand, cannot issue shares of stock as they are owned and operated by a single individual.

Review the incorrect statements in the problem. For example, the claim that a corporation is always managed by a single individual or that sole proprietorships can issue shares of stock is incorrect. Use this understanding to identify the correct answer.