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 best describes the difference between sole proprietorships and partnerships?

Partnerships are not required to file tax returns, but sole proprietorships are.

Sole proprietorships can issue stock, but partnerships cannot.

A sole proprietorship is owned by one individual, while a partnership is owned by two or more individuals.

A sole proprietorship offers limited liability, whereas a partnership does not.

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Verified step by step guidance

Step 1: Understand the key characteristics of a sole proprietorship. A sole proprietorship is a business owned and operated by one individual. It is the simplest form of business structure and does not offer limited liability protection, meaning the owner is personally responsible for all debts and obligations of the business.

Step 2: Understand the key characteristics of a partnership. A partnership is a business owned by two or more individuals who share the profits, losses, and responsibilities of the business. Similar to sole proprietorships, partnerships generally do not offer limited liability protection unless structured as a limited partnership or limited liability partnership.

Step 3: Compare the ownership structure. The primary difference between the two is the number of owners: sole proprietorships have one owner, while partnerships have two or more owners.

Step 4: Clarify the liability aspect. Neither sole proprietorships nor general partnerships offer limited liability protection, meaning the owners are personally liable for the business's debts. However, this can vary if the partnership is structured differently (e.g., limited liability partnership).

Step 5: Address misconceptions in the options provided. Sole proprietorships cannot issue stock, and both sole proprietorships and partnerships are required to file tax returns. The correct distinction is based on ownership structure: sole proprietorships are owned by one individual, while partnerships are owned by two or more individuals.