Accounting Notes

Accounting Notes - Accounting Notes 2009-01-21 Sole...

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Accounting Notes 22:40 Sole proprietorship Business owned by one person Simple to establish Owner controlled Tax advantages Owner personally liable Financing difficult Partnership Two or more owners Simple to establish Shared control Tax advantages Personal liability Corporation Separate legal entity owned by stockholders Easy to transfer ownership Greater capital raising potential Lower legal liability Unfavorable tax treatment Users of Financial Information Internal vs. External o Internal Users: Managers who plan, organize and run a business
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Marketing managers Production supervisors Finance directors Company officers o External Users Investors Creditors Others Regulatory agencies Tax authorities Customers Labor Unions Economic planners Ethics  Effective financial reporting depends on sound ethical behavior
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Accounting Notes - Accounting Notes 2009-01-21 Sole...

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