Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 12, Problem 1E
Determine whether each characteristic describes a general
_______ a. Must pay a business (corporate) income tax.
_______ b. When the business cannot pay its debts, creditors can take the owners’ personal assets.
_______ c. All owners can have management duties.
_______ d. The owners are often referred to as members.
_______ e. Ownership is split among two types of owners: general and limited partners.
_______ f. Owners have limited liability.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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
The following describe several different business organizations. Determine whether each description bestrefers to a sole proprietorship (SP), partnership (P), corporation (C), or limited liability company (LLC). Micah and Nancy own Financial Services, which pays a business income tax. Micah and Nancy do not have personal responsibility for the debts of Financial Services.
1. Which of the following is not taxable income?
a.Interest
b.Hobby income
c.Child support payments
d.Royalties
e.Dividends
2. Generally, for an activity to be treated as a trade or business, which of the following is required:
a.No more than intermittent effort toward the activity
b.Regular and continual effort designed to seek profit
c.Always generate a profit
d.Organization as a corporation or partnership
3. To be deductible as the cost of special work clothing or uniforms:
a.The clothing need not be required as a condition of the job, but must not be suitable for everyday use.
b.The clothing must be required as a condition of the job, but can also be suitable for everyday use.
c.The clothing must not be suitable for everyday use and must be required as a condition of the job.
d.Only the cost of the clothing is included; upkeep is not deductible.
Chapter 12 Solutions
Principles of Financial Accounting.
Ch. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQ
Ch. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 1QSCh. 12 - Prob. 2QSCh. 12 - Prob. 3QSCh. 12 - Prob. 4QSCh. 12 - Prob. 5QSCh. 12 - Prob. 6QSCh. 12 - Prob. 7QSCh. 12 - Prob. 8QSCh. 12 - The Field, Brown Snow partnership was begun with...Ch. 12 - Prob. 10QSCh. 12 - Determine whether each characteristic describes a...Ch. 12 - For each separate case, indicate which type of...Ch. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 1APCh. 12 - Prob. 2APCh. 12 - Prob. 3APCh. 12 - Prob. 4APCh. 12 - Prob. 5APCh. 12 - Prob. 6APCh. 12 - Prob. 1BPCh. 12 - Prob. 2BPCh. 12 - Prob. 3BPCh. 12 - Prob. 4BPCh. 12 - Prob. 5BPCh. 12 - Prob. 6BPCh. 12 - Prob. 12SPCh. 12 - Prob. 1AACh. 12 - Prob. 2AACh. 12 - Review Samsungs 1938 to 1970 history at...Ch. 12 - Prob. 1BTNCh. 12 - Prob. 2BTNCh. 12 - Prob. 3BTNCh. 12 - Prob. 5BTN
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Owners have no personal liability under which legal business structure? A. a corporation B. a partnership C. a sole proprietorship D. There is liability in every legal business structure.arrow_forwardFranklin, John, Henry, and Harry have decided to pool their financial resources and business skills in order to open up and run a coffee shop. They will share any profits or losses that the business generates and will be personally responsible for making good on any debt that their business undertakes. Their business should be classified as a. corporation. b. sole proprietorship. c. partnership. d. none of the above.arrow_forward(please correct answer finance question) Explain the following business structures: sole proprietorship, partnership, LLC, and a corporation. Analyze the following for each business structure: steps to form personal liability for owners taxation advantages and disadvantagesarrow_forward
- 46. The allocation of owner's private expenses to his/her business violates which of the following? A.O Accrual concept B.Matching concept C.Separate business entity concept D.Consistency conceptarrow_forwardMa1. TRUE /FALSE in computing a partnerships business income the amount that can be claimed as CCA follows the very same rules that apply to other taxpayersarrow_forwardWhich of the following statements is true of a sole proprietorship? A. A sole proprietorship has to pay business income taxes. B. A sole proprietorship joins two or more individuals as co−owners. C. The sole proprietor is personally liable for the liabilities of the business. D. A sole proprietorship is taxed separately from the owner.arrow_forward
- select the form to organize your business: partnership, Limited Liability Company (LLC), S-Corporation, or regular corporation. What’s your final decision, and why you choose what you selected, and why you didn’t choose what you didn’t select.arrow_forwardListed below are several statements regarding different forms of business organization. For each statement, indicate if that statement is true or false for each proprietorship and partnership.(a)Owners have limited liability.(b)Records of the business are combined with the personal records of the owner or owners.(c)Required to follow IFRS.(d)Pays income taxes on its profits.(e)Owners are called "shareholders."(f)Will have more than one owner.(g)Has a limited life.(h)Has a separate legal existence from its owners.arrow_forwardDetermine whether each characteristic describes a general partnership (GP), limited liability company(LLC), both, or neither. Must pay a business (corporate) income tax.arrow_forward
- Businesses can be classified into the following forms: sole proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP). Different forms of businesses have different characteristics. Which of the following characteristics would apply to a limited liability company and a limited liability partnership? Check all that apply. LLPs are not suitable for professional firms such as accounting, law, and architecture Limited financial liability Taxed as a partnership Have corporate ownership structure Owned by single individual Owners have limited liability and right to votearrow_forwardA drawback of a sole proprietorship is: O a. the unlimited liability of the partners. O b. conflicts with partners. O c. the complexity and cost to keep the records required by law. O d. its continued existence regardless of whether the owner lives or dies. O e. difficulty in obtaining financing.arrow_forwardA business entity that has no ;ax liability because the entity's income is passed through to the owners, who pay taxes on it is O a. 0 b. O c. 0 d. a pass-through entity. a sole proprietorship an entrepreneur. an independent contractor.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
How to (Legally) Never Pay Taxes Again; Author: Next Level Life;https://www.youtube.com/watch?v=q63F1pBrUHA;License: Standard Youtube License