ACCT 203 Chapter Notes - Chapter 1: Sole Proprietorship, Accounting Equation, Retained Earnings
2 Sep 2017
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Document Summary
Financial scandal results in lowered trust of financial institutions. Top management to certify accuracy of financial info. Business can be organized as sole proprietorship, partnership, or corporation. Advantages: simple to establish, owner controlled, tax advantages. Partnerships: owned by more than one person. Disadvantages: partners personally liable, transfer of ownership may be skills and resources difficult. Often formed as lack of individual funds are present to initiate or expand business. Corporation: large entity owned by stockholders. sole and partnerships often end up incorporating liability. Primary function of accounting to provide financial information to help users make decisions. Solving ethical problems: recognize the issue identify and analyze identify. Financing activities: to start/expand a business, owner or owners often need cash from alternatives and weigh impact outside sources. Common stock (total amount paid in by stockholders for shares they purchased) Investments in debt or equity securities of another company. Revenue is increased in assets resulting from sale of a product or service.
