Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Question
Chapter 14, Problem 1Q
To determine
Describe the advantages and the disadvantages of operating a business as a partnership rather than as a corporation.
Expert Solution & Answer
Explanation of Solution
The advantages of operating a business as a partnership rather than as a corporation are:
- The ability to make virtually arrangements defining their relationship to each other that the partners desire.
- Less hassle of forming a partnership.
- Fixed oral agreement is required to form a partnership.
- Operating costs are reduced and partners can make decisions which they desire.
- Partnership can claim losses as tax and do not pay taxes.
The disadvantages of operating a business as a partnership rather than as a corporation are:
- Partners have unlimited liability.
- Every partner is liable to pay the debts incurred.
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Chapter 14 Solutions
Advanced Accounting
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - Prob. 3QCh. 14 - Prob. 4QCh. 14 - Prob. 5QCh. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - Prob. 8QCh. 14 - Prob. 9QCh. 14 - Prob. 10Q
Ch. 14 - Prob. 11QCh. 14 - Prob. 12QCh. 14 - What is a partnership dissolution? Does...Ch. 14 - Prob. 14QCh. 14 - Prob. 15QCh. 14 - Prob. 16QCh. 14 - Prob. 17QCh. 14 - When a partner withdraws from a partnership, why...Ch. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - Prob. 19P
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Similar questions
- Which of the following is a disadvantage of the partnership form of organization? A. limited life B. no taxation at the partnership level C. flexibility in business operations D. combining of financial resourcesarrow_forwardOwners 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_forwardWhile sole proprietorships and corporations are the most popular forms of business organization, the limited liability company (LLC) is a close third. Limited liability companies are treated like partnerships in the majority of situations. Why do you think LLCs are gaining in popularity?arrow_forward
- Explain the advantages and disadvantages of the partnership versus the corporate form of business.arrow_forwardWhat are the main advantages of a company compared to a sole trader and a partnership?arrow_forwardWhat is a corporation? Why might founders have chosen to form a corporation rather than a partnership? What are the advantages and disadvantages of incorporation?arrow_forward
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