AFA 100 Lecture Notes - Lecture 1: Sole Proprietorship, International Financial Reporting Standards, Retained Earnings
16 Sep 2016
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Chapter 1 business decisions and financial accounting. Accounting summarizes info. so people can make decisions. : business owned and operated by one person. Easiest forms of business; it only requires a business licence to form. All profits and debts/loans are part of the owner"s life hence he/she is liable for debts and profits are part of the taxable income (possible more income tax): partnership. : similar to s. p however it is owned and operated by 2 or more persons. More expensive to form as a lawyer is required to form an agreement amongst the partners (division of income, amount of bonuses to old and new partners, etc. ) has more resources available: corporation. : is a separate entity in a legal and accounting perspective. Means that the corporation is responsible for taxes and debts not its owners/shareholders. > owners can"t lose more than what they"ve invested.
