Accounting 201 Exam 1
sheilaokuku19
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Sole Proprietorship
business owned by one person
simple to establish
owner controlled
tax advantages
owner personally liable
financially difficult
Partnership
2 or more owners
simple to establish
shared control
broader skills and resources
tax advantages
personally liable
Terms (46)
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, Corporation
separate legal entity owned by stockholders
easy to transfer ownership
greater capital raising potential
unfavorable tax treatment
lower legal liabilities for owners
Internal Users of Financial Info
Managers
-Finance borrow $ or issue stock?
-Marketing advertising costs
-HR hire or lay off ppl?
-Management expand busi? sell off parts?
External Users of Financial Info
-Investors who should I invest in?
-Creditors should I loan them $?
-Others regulatory agencies, tax authorities, customers, labor
Types of Business Activities - Financing
get large sums of $ from 2 sources:
1. Creditors- borrowing creates liabilities(things the company owes)
2. Owners- selling/issuing stock to shareholders(shareholders equity-how much of a
company a stockholder owns)
Types of Business Activities - Investing
obtaining resources or assets(things that have value to the company) to operate a
business
e.g. buying and selling land, buildings, equipment, vehicles
sheilaokuku19
Save
Sole Proprietorship
business owned by one person
simple to establish
owner controlled
tax advantages
owner personally liable
financially difficult
Partnership
2 or more owners
simple to establish
shared control
broader skills and resources
tax advantages
personally liable
Terms (46)
Hide definitions
, Corporation
separate legal entity owned by stockholders
easy to transfer ownership
greater capital raising potential
unfavorable tax treatment
lower legal liabilities for owners
Internal Users of Financial Info
Managers
-Finance borrow $ or issue stock?
-Marketing advertising costs
-HR hire or lay off ppl?
-Management expand busi? sell off parts?
External Users of Financial Info
-Investors who should I invest in?
-Creditors should I loan them $?
-Others regulatory agencies, tax authorities, customers, labor
Types of Business Activities - Financing
get large sums of $ from 2 sources:
1. Creditors- borrowing creates liabilities(things the company owes)
2. Owners- selling/issuing stock to shareholders(shareholders equity-how much of a
company a stockholder owns)
Types of Business Activities - Investing
obtaining resources or assets(things that have value to the company) to operate a
business
e.g. buying and selling land, buildings, equipment, vehicles
