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

Which of the following is a disadvantage of a sole proprietorship?

Limited ability to raise capital

Unlimited personal liability for business debts

Double taxation of profits

Complex and costly to establish

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Verified step by step guidance

Understand the concept of a sole proprietorship: A sole proprietorship is a business structure where a single individual owns and operates the business. It is the simplest and most common form of business ownership.

Identify the disadvantages of a sole proprietorship: Sole proprietorships have certain drawbacks, such as limited ability to raise capital and unlimited personal liability for business debts. These are key disadvantages to consider.

Clarify the meaning of 'limited ability to raise capital': Since sole proprietorships rely on the owner's personal resources or loans, they often face challenges in securing large amounts of funding compared to corporations or partnerships.

Explain 'unlimited personal liability for business debts': In a sole proprietorship, the owner is personally responsible for all business debts. This means creditors can pursue the owner's personal assets if the business cannot pay its obligations.

Eliminate incorrect options: Double taxation of profits and complex, costly establishment are not disadvantages of sole proprietorships. Double taxation applies to corporations, and sole proprietorships are relatively simple and inexpensive to set up.