Section 1 - ACC 200 - Spring 2011 Section 1: Forms of...

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Click to edit Master subtitle style ACC 200 - Spring 2011 Section 1: Forms of Business Ownership and The Role of Accounting Lecture Class # 1 Christopher T. McKittrick CPA, MBA, CFE College of Management
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22 Section 1 - Objectives ¢ Contrast the sole proprietorship, partnership (general and limited) corporate (C-corp and S-corp), and limited liability (LLC and LLP) forms of business ownership. ¢ Describe the advantages and disadvantages of the sole proprietorship, partnership, corporate and limited liability (LLP and LLC) forms of business ownership, ¢ Contrast the tax treatment of the sole proprietorship, partnership, C- corporation, S-corporation, and LLC forms of business ownership, ¢ Describe the three business activities of financing, investing and operating, ¢ Define accounting and its role in business, ¢ Describe and illustrate the basic financial statements and how they interrelate, ¢ Define assets, liabilities, owners’ equity, revenue and expense and understand their relationship to the financial statements, and ¢ Describe the basic accounting concepts underlying financial reporting including the monetary unit assumption, time period assumption, going concern assumption, cost principle, and full disclosure principle .
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OBJECTIVE OF BUSINESS ¢ To provide products or services … ¢ …that are valued in the market place ¢ … while providing employment opportunity ¢ … and doing all this at a profit
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Types of Businesses Service Company Production/ Manufacturing Company Merchandising Company Wholesaler Retailer
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Selection of Organizational Structure - Factors to Consider ¢ Legal Business Forms ¢ Control ¢ Profit Sharing ¢ Taxation ¢ Liability ¢ Resources
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66 Forms of Business Ownership ¢ Sole proprietorship ¢ Corporation C corp vs. S corp ¢ Partnership General vs. limited ¢ LLC and LLP
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Forms of Business Organization 77 Owned by one person Sole Proprietorship Partnership Owned jointly by two or more individuals Corporation Owned by one or more persons called “stockholders”
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Forms of Business Organization 88 Majority of all business (70%) Formation is simple and relatively inexpensive Sole Proprietorship Partnership Common for small businesses and professional practices Corporation Organized under the laws of a particular state
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Forms of Business Organization 99 Owner is personally liable for the debts of business Sole Proprietorship Partnership Partners are jointly responsible for the debt of the partnership Corporation Legally separate from owners. Stockholders’ liability limited to amount of investment
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Forms of Business Organization 1010 Can be formed or dissolved at the wishes of the owner Sole Proprietorship Partnership Automatically dissolved when any partner leaves Corporation Ownership can be easily transferred without affecting corporation
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1111 Forms of Business Ownership ¢ Compare with respect to: Ease of Formation and Operation Ease of Raising Capital Liability Issues Taxation
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This note was uploaded on 03/10/2011 for the course ACC 200 taught by Professor Buckless during the Spring '08 term at N.C. State.

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Section 1 - ACC 200 - Spring 2011 Section 1: Forms of...

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