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 a consideration when choosing a form of business organization?

The extent of liability the owners are willing to assume

The personal hobbies of the shareholders

The color of the company's logo

The number of employees in the local government

Previous problemNext problem

Verified step by step guidance

Understand the concept of business organization forms: A business organization can take various forms such as sole proprietorship, partnership, corporation, or limited liability company (LLC). Each form has distinct characteristics, including liability, taxation, and management structure.

Identify the key consideration in choosing a business organization: The extent of liability the owners are willing to assume is a critical factor. Liability refers to the legal responsibility for debts and obligations of the business. Owners must decide whether they want to limit their personal liability or assume full responsibility.

Eliminate irrelevant options: The personal hobbies of shareholders, the color of the company's logo, and the number of employees in the local government are not factors that influence the choice of business organization. These options are unrelated to the financial and legal aspects of the decision.

Focus on liability: For example, in a sole proprietorship, the owner has unlimited liability, meaning personal assets can be used to cover business debts. In contrast, corporations and LLCs offer limited liability, protecting personal assets from business obligations.

Conclude the importance of liability: When choosing a form of business organization, owners must carefully evaluate their willingness to assume liability, as this decision impacts their financial risk and legal exposure.