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

Dave owns a soda and cookie shop by himself and is personally liable for all the business's debts. Which type of business organization does Dave most likely have?

Partnership

Corporation

Sole proprietorship

Limited liability company (LLC)

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Verified step by step guidance

Step 1: Understand the characteristics of each type of business organization mentioned in the problem. A partnership involves two or more individuals sharing ownership and liability. A corporation is a separate legal entity that limits personal liability for its owners. A sole proprietorship is owned by one individual who is personally liable for all debts. An LLC provides limited liability protection to its owners.

Step 2: Analyze the details provided in the problem. Dave owns the shop by himself, which means he is the sole owner. Additionally, he is personally liable for all the business's debts, which is a key characteristic of a sole proprietorship.

Step 3: Compare the characteristics of a sole proprietorship with the information given. Since Dave is the sole owner and personally liable, this aligns with the definition of a sole proprietorship.

Step 4: Eliminate the other options. A partnership requires multiple owners, which is not the case here. A corporation and an LLC both provide limited liability protection, which contradicts the fact that Dave is personally liable for the debts.

Step 5: Conclude that the correct type of business organization for Dave is a sole proprietorship based on the information provided and the characteristics of the business types.