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

Caleb and Anna have started a business together, sharing both profits and losses equally, and have not filed any formal paperwork with the state. What type of business organization are they most likely operating under?

Corporation

Partnership

Limited Liability Company (LLC)

Sole Proprietorship

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Verified step by step guidance

Understand the characteristics of each type of business organization listed in the problem: Corporation, Partnership, Limited Liability Company (LLC), and Sole Proprietorship.

Recognize that Caleb and Anna are sharing profits and losses equally, which is a key feature of a Partnership. Partnerships typically involve two or more individuals who agree to share the financial outcomes of the business.

Note that no formal paperwork has been filed with the state. This aligns with the nature of a Partnership, as it can be formed informally without requiring state registration, unlike Corporations or LLCs.

Eliminate Sole Proprietorship as an option because it involves a single owner, whereas Caleb and Anna are co-owners.

Conclude that the most likely business organization Caleb and Anna are operating under is a Partnership, based on the shared profits and losses and the lack of formal paperwork.