W2 - ACCOUNTING AND BUSINESS - ACCOUNTINGAND BUSINESS...

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ACCOUNTING AND  BUSINESS
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OF BUSS ACTIVITIES 3 forms of business organization: 1. Sole proprietorship 2. Partnership 3. Corporation
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SOLE PROPRIETORSHIP Business owned by one person No special requirements to start  business Separate entity for accounting purposes  but not separate legal entity from its  owner. Unlimited liability Income subject to owner’s personal  income tax not business income tax
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PARTNERSHIP Business owned by two or more people No special requirements to start  business. Only an agreement Not legally separated from its owner Unlimited liability 3 types of limited liability: Limited partnership Limited liability partnership Limited liability company.
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CORPORATION Business legally separate from its  owner. Separate legal status means that a  corporation can conduct business with  the rights, duties and responsibilities of  a person. A corporation acts through its manager,  who are its legal agents. Advantage is limited liability Disadvantage is ‘double taxation’
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ELEMENTS OF FINANCIAL  STATEMENTS (FRS101) ASETS LIABILITIES OWNER’S EQUITY INCOME EXPENSES
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ASSETS Resources owned or controlled by a  company Expected to yield future benefits Example: cash, inventories and  equipment.
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This note was uploaded on 10/24/2011 for the course ACCOUNTING 101 taught by Professor Abraham during the Spring '11 term at Abraham Baldwin Agricultural College.

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W2 - ACCOUNTING AND BUSINESS - ACCOUNTINGAND BUSINESS...

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