Question 1: a) Differentiate between Partnership and Corporation. (Write any 4) b) Explain about the importance of preparing financial statements in the business. c) Write any four differences between Accrual basis and Cash basis and mention few examples also
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Question 1:
a) Differentiate between
b) Explain about the importance of preparing financial statements in the business.
c) Write any four differences between Accrual basis and Cash basis and mention few examples also
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Solved in 5 steps
- Which sentence is not true? Select one: a. In Partnership, the ownership divided into shares of stock. b. Profit or loss has an effect on the owner's equity. c. Companies usually prepare 4 financial statements. d. Assets are resources for providing future services or benefits.18) Which one of the following will not be recorded in profit and loss appropriation account? a. Commission to partner b. Interest on capital c. Salary to partner d. Interest paid to bank⦁ Explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.⦁ How do dividends affect owners’ equity? Are they treated as a business expense? Explain
- The proprietary theory, the entity theory, and the funds theory are three approaches to accounting for equities. Required: a. Describe briefly each of these theories b. State your reasons for emphasizing the application of one of these theories to each of the following: i. Single proprietorship ii. Partnership iii. Financial institutions (banks) iv. Consolidated statements v. Estate accounting1. What is a Statement of Changes in Equity? 2. What are the elements of an SCE? 3. Differentiate the SCE of a sole proprietorship, a partnership and a corporation.B. Analysis of Information. Presented below are possible advantages and disadvantages. You are to determine in the first column whether the item pertains to an advantage or disadvantage. On the second column, you are to determine the related business organization. Item 1 has been done for you.Information Advantage or DisadvantageBusiness Organization1. In the event of bankruptcy, business creditors can run after the personal assets of the owners.Disadvantage Sole Proprietorship Partnership2. Involvement of more persons in the business, hence more sources of expertise as compared to the most simple business organization.3. Transferability of ownership4. Limited life5. Business organization as a juridical or separate person6. Corporate existence of 50 years, renewable7. Most limited source of funding8. Most regulated business organization9. Double taxation10. Limited liability11. Unlimited liability
- In 2-3 sentences, explain how the treatment of an individual partner in a partner-ship or shareholder in an S corporation highlights the fact that the receipt of cash (money) is not necessarily the same as the receipt of income.Which financial statement of a partnership reflects the profitability of the business? A. Statement of Financial Position B. Statement of Cash Flows C. Statement of Comprehensive Income D. Statement of Changes in EquityIs a mutiple question: Question : Accounting for the day-to-day activities for a Partnership or Limited Liability Corporation (LLC) is generally: Group of answer choices 1. the same as the accounting for a sole proprietorship only 2. the same as the accounting for any other form of business 3. is not the same as the accounting for any other form of business 4. the same as the accounting for a corporation only
- Assess the truth of this statement: The normal balance of a partner's capital account is a credit balance. Group of answer choices This statement is true. This statement is false. There is not enough information to determine whether or not this statement is true. This statement is not applicable to accounting concepts.Which type of business organization is owned by only one owner? a. Corporation b. Partnership c. Sole proprietorship d. Items a, b, and c are all correct.Give the pros and cons of using partnership, corporation and any other forms in establishing own accounting firm.