SMG AC 221 Lecture Notes - Lecture 1: Financial Accounting Standards Board, Sole Proprietorship, Promissory Note
23 Jan 2017
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Investment decisions * where financial recording comes in. Control- part of management - to maintain proper accountability. Assets - what an entity owns to generate profit. Promissory note - adds to cash and liabilities. Decrease in assets = decrease in liabilities. Entirely owned by one individual - usually just a corner store rare to have a lot of debt. Two or more individuals that are contributing capital. Each partner liable in the partnership, can be a much larger business. Has general partner, unlimited liability, they have investors in business and no management. The limited partners can only lose their investment while general can lose everything. Doesn"t have same rights as a real individual. Has limited liability (detached from owners) - can"t go personally after the investors (can only go after assets of corporation) The bikes owned by bike shop are the only assets that are important assets that are important of the sole proprietorship.
