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 characteristic of the proprietorship form of business organization?

Ownership is easily transferred through the sale of stock.

Profits are taxed at the corporate tax rate.

The owner has unlimited liability for business debts.

It is a separate legal entity from its owner.

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Verified step by step guidance

Step 1: Understand the concept of a proprietorship form of business organization. A proprietorship is a business owned and operated by a single individual, and it is not legally separate from its owner.

Step 2: Analyze the characteristic of unlimited liability. In a proprietorship, the owner is personally responsible for all business debts, meaning creditors can claim the owner's personal assets if the business cannot pay its debts.

Step 3: Compare the other options provided in the question. For example, ownership transfer through stock sales and corporate tax rates are characteristics of corporations, not proprietorships.

Step 4: Evaluate the option stating 'It is a separate legal entity from its owner.' This is incorrect for proprietorships, as they are not legally separate from their owners.

Step 5: Conclude that the correct characteristic of a proprietorship is 'The owner has unlimited liability for business debts,' as this aligns with the definition and nature of this form of business organization.