ACC 225 Week 1 Exercise - This business can be listed as a...

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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. This company is known as a corporation. (b) Delta is owned by Sarah Gomez, who is personally liable for the debts of the business. This business can be listed as a 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. This business can be listed as a partnership. (d) Sung Kwon and Frank Heflin own Get-It-There, a courier service. Both are personally liable for the debts of the business. This business can be listed as a partnership.
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(e) XLT Services does not have separate legal existence apart from the one person who owns it. This business can be listed as a sole proprietorship. (f) BioProducts does not pay income taxes and has one owner.
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Unformatted text preview: This business can be listed as a sole proprietorship. (g) Tampa Biz pays its own income taxes and has two owners This business can be listed as a partnership. 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 that they might seek to answer through their use of accounting information. 1. Shareholders (investors), who seek answers to questions such as: a. Are resources owned by a business adequate to carry out plans? b. Are the debts owed excessive in amount? 2. Creditors, who seek answers for questions such as: a. Does the business have the ability to repay its debts? b. Can the business take on additional debt? 3. Employees, who seek answers to questions such as: a. Is the business financially stable? b. Can the business afford to pay higher salaries?...
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This note was uploaded on 02/21/2012 for the course ACC 225 acc 225 taught by Professor Unknown during the Spring '10 term at University of Phoenix.

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ACC 225 Week 1 Exercise - This business can be listed as a...

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