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 best explains why a sole proprietor might want to take on a partner?

To share the risks and responsibilities of running the business

To eliminate the need for business licenses

To avoid paying any business taxes

To ensure unlimited liability is removed from the business

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Verified step by step guidance

Understand the nature of a sole proprietorship: A sole proprietorship is a business owned and operated by one individual. The owner has unlimited liability, meaning they are personally responsible for all debts and obligations of the business.

Consider the concept of partnership: A partnership involves two or more individuals who share ownership, responsibilities, and risks of running the business. This can help distribute the workload and financial risks.

Evaluate the incorrect options: Eliminating the need for business licenses is not a valid reason for taking on a partner, as licenses are typically required regardless of the business structure. Similarly, avoiding business taxes is not possible, as taxes are a legal obligation for all businesses.

Analyze the liability aspect: While taking on a partner does not remove unlimited liability in a general partnership, it does allow the risks and responsibilities to be shared between partners, which can make managing the business more feasible.

Conclude the correct reasoning: The best explanation for why a sole proprietor might want to take on a partner is to share the risks and responsibilities of running the business, as this can provide support and reduce the burden on a single individual.