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

Wendy owns a small diner in her hometown. What type of business organization does Wendy most likely own?

Partnership

Corporation

Limited liability company (LLC)

Sole proprietorship

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Verified step by step guidance

Understand the concept of business organizations: A sole proprietorship is a business owned and operated by one individual. It is the simplest form of business organization and does not require formal registration beyond local permits and licenses.

Analyze the characteristics of a sole proprietorship: Wendy owns a small diner, which suggests she is likely the sole owner and operator of the business. Sole proprietorships are common for small businesses due to their simplicity and ease of setup.

Compare the other options: Partnerships involve two or more owners sharing profits and responsibilities. Corporations are separate legal entities owned by shareholders. Limited liability companies (LLCs) combine features of partnerships and corporations, offering limited liability protection.

Determine why sole proprietorship is the most likely answer: Since Wendy is described as owning a small diner in her hometown, it is reasonable to assume she operates it independently without partners or shareholders, which aligns with the characteristics of a sole proprietorship.

Conclude the reasoning: Based on the information provided and the nature of small businesses, Wendy most likely owns a sole proprietorship, as it is the most straightforward and common structure for individual business owners.