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 statements correctly describe characteristics of a sole proprietorship?

The owner has unlimited personal liability for business debts.

The business is taxed separately from its owner.

It is easy to establish and dissolve.

Ownership is divided among shareholders.

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Verified step by step guidance

Step 1: Understand the concept of a sole proprietorship. A sole proprietorship is a business owned and operated by one individual. It is the simplest and most common form of business organization.

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

Step 3: Evaluate the statement 'The business is taxed separately from its owner.' This is incorrect for a sole proprietorship because the business income is reported on the owner's personal tax return, and the business is not taxed as a separate entity.

Step 4: Consider the ease of establishment and dissolution. A sole proprietorship is easy to establish because it does not require formal registration or complex legal processes. Similarly, it is easy to dissolve since the owner has full control over the business.

Step 5: Examine the statement 'Ownership is divided among shareholders.' This is incorrect because a sole proprietorship is owned by a single individual, and there are no shareholders involved.