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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is FALSE regarding a sole proprietorship?

A sole proprietorship is easy and inexpensive to establish.

A sole proprietorship is a separate legal entity from its owner.

The owner has unlimited liability for the debts of the business.

Profits earned by the business are taxed as the owner's personal income.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of a sole proprietorship. A sole proprietorship is a type of business structure where the business is owned and operated by a single individual. It is the simplest and most common form of business ownership.

Step 2: Analyze the characteristics of a sole proprietorship. Key features include: (a) It is easy and inexpensive to establish, (b) The owner has unlimited liability for the debts of the business, (c) Profits earned by the business are taxed as the owner's personal income, and (d) It is not a separate legal entity from its owner.

Step 3: Evaluate the statement 'A sole proprietorship is a separate legal entity from its owner.' This statement is FALSE because, in a sole proprietorship, the business and the owner are legally the same entity. The owner is personally responsible for all debts and obligations of the business.

Step 4: Compare the other statements provided in the problem. The other statements are true: (a) A sole proprietorship is easy and inexpensive to establish, (b) The owner has unlimited liability for the debts of the business, and (c) Profits earned by the business are taxed as the owner's personal income.

Step 5: Conclude that the correct answer to the problem is the statement 'A sole proprietorship is a separate legal entity from its owner,' as it is the only false statement among the options provided.