ECON 2710 Chapter Notes -Sole Proprietorship, Legal Personality, Financial Statement

• School: York University
• Department: Economics
• Course: ECON 2710
• Professor: Robert J E M Despatie

Document Summary

Accounting: an information system that identifies, measures, records and communicates faithfully and accurately an organization"s economic activities. Recordkeeping: (bookkeeping) a part of accounting that involves recoding economic transactions. Sole proprietorship: is an individual owning and operating a business alone; is fully responsible for all profits, losses, and debt as there is no legal distinction between the owner and their business. Partnership: like a sole proprietorship is fully responsible for all profits, losses, and debt; except business is owned and operated by two or more individuals. Corporations: unlike a sole proprietorship or partnership is a separate legal entity from its owner, responsible for its own profits, debt, losses; is able to act with rights, duties and responsibilities of a person. Unlimited liability: applies to sole proprietorship and partnerships; when debts are greater the business" resources, the owners are financially responsible. Limited liability: applies to corporations; the owner"s liability is limited to the amount invested into the business.