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Chapter 11 Shareholders Equity

Chapter 11 Shareholders Equity - Chapter 11 Shareholders...

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Chapter 11 Shareholders Equity 11.1 Equity and its components 11.2 Accounting for equity Equity= Assets-liabilities what’s left to investors if all assets are sold and liabilities are paid. Major Business forms: 1. Private Firm (proprietorship) Single owner 100% control Unlimited liability Sole claim on all profit/losses Financial info is private One equity account 2. Partnership 2 or more owners Partial control All rights/responsibilities are specified in partnership agreement General partners assume unlimited liability Limited assumes less liability Financial info is private Separate equity account for each and every partner 3. Corporation Many owners Limited-no control Limited liability Financial info is public
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Equity is divided into several components Corporate Structure: shareholders elect board of directors appoint top management who hires employees.
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