Types of Business - Types of Business o Characteristics of...

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Types of Business o Characteristics of the businesses: Advantages and disadvantages Sole proprietorship- simple to establish, owner controlled, tax advantages Partnership- simple to establish, shared control, broader skills and resources, tax advantages Corporation- Easy to transfer ownership, easy to raise funds, no personal liability Users (Internal and External) and their needs of financial information o Internal: marketing managers, production supervisors, finance directors, and company officers o External: investors or creditors Business Activities o Financing, Investing, Operating Prepare a retained earnings statement, income statement, and balance sheet o Balance Sheet: A picture at a point in time of what the business owns (assets) and what it owes (liabilities) o Income Statement: Shows how successful business has been in report, using revenues and expenses o Retained Earnings Statement: Shows what income was distributed among the owners (dividends) and what was kept in the business. (Though Statement of stockholders equity is preferable.) o Statement of Cash Flows: Shows where cash came from and where it went over a period of time Basic Accounting Equation : Assets = Liabilities + Stockholders’ Equity Definition of short term vs. long term assets and liabilities
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Types of Business - Types of Business o Characteristics of...

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