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 true of a sole proprietorship?

Ownership can be easily transferred to others without legal formalities.

The owner has unlimited personal liability for the business's debts.

It is taxed as a separate legal entity from its owner.

It requires at least two owners to be established.

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Verified step by step guidance

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.

Analyze the first statement: 'Ownership can be easily transferred to others without legal formalities.' This is incorrect because a sole proprietorship is tied to the individual owner, and transferring ownership typically requires dissolving the business and re-establishing it under a new owner.

Evaluate the second statement: 'The owner has unlimited personal liability for the business's debts.' This is correct because in a sole proprietorship, the owner is personally responsible for all debts and obligations of the business, meaning their personal assets can be used to settle business liabilities.

Assess the third statement: 'It is taxed as a separate legal entity from its owner.' This is incorrect because a sole proprietorship is not a separate legal entity. The business income is reported on the owner's personal tax return, and the owner pays taxes on the business income as part of their individual income tax.

Review the fourth statement: 'It requires at least two owners to be established.' This is incorrect because a sole proprietorship, by definition, is owned and operated by a single individual.