Exercise- Accounting and Business Organizations

Exercise- Accounting and Business Organizations - Sole...

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EXERCISE 1-1 The following describe several different business organizations. Determine whether the description refers to a sole proprietorship, partnership, or corporation. A. Ownership of Spirit Company is divided into 1,000 shares of stock. Corporation B. Delta is owned by Sarah Gomez, who is personally liable for the debts of the business. Sole Proprietorship C. Jo Chen and Al Fitch own Financial Services, a financial services provider. Neither Chen nor Fitch has personal responsibility for the debts of Financial Services. Corporation D. Sung Kwon and Frank Heflin own Get-It-There, a courier service. Both are personally liable for the debts of the business. Partnership E. XLT Services does not have separate legal existence apart from the one person who owns it.
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Unformatted text preview: Sole Proprietorship F. BioProducts does not pay income taxes and has one owner. Sole Proprietorship G. Tampa Biz pays its own income taxes and has two owners. Partnership EXERCISE 1-4 Much of accounting is directed at servicing the information needs of those users that are external to an organization. Identify at least three external users of accounting information and indicate two questions they might seek to answer through their use of accounting information. Three external users: Shareholders (investors), lenders, and suppliers. Are they able to repay what was bought or borrowed? What is their credit score?...
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