ACCT 2301 Study Guide - Comprehensive Final Exam Guide - Balance Sheet, Accounting, Financial Statement
Document Summary
Advantages: easiest to form, tax advantages (since owner and company are same- only pays personal income tax) Advantages: broader skill set, easy to form, tax advantages. Advantages: easiest to raise capital, easiest to transfer capital, liability protection for investors (only responsible for $ invested) Company needs $ to support operations: debt financing- borrowing $ from creditors, equity financing- selling stocks to investors. Acquisition or disposition of items such as land, buildings, and equipment. Investors need to know how profitable the company is compared to its competitors. Creditors need to know if the company has the ability to repay its loans. Regulators need to know if rate increases are justified. Management needs to know the profitability of each division. The finance department needs to know if there is enough cash to pay its short-term expenses. Human resources needs to know the effect of a four percent raise for all employees.
