Chapter#2A: Forms of Business Ownership Flashcards Preview

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Flashcards in Chapter#2A: Forms of Business Ownership Deck (16)
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1

What is a sole proprietorship?

it's when a business is owned by a single individual

2

How big are Sole proprietorship?

They tend to be small Retail businesses or businesses where the owner provides most of the services to his clients

3

What is a Partnership?

It's when a number of owners join together and create one business

4

What is a partnership agreement?

its when all partners sign and establish rules about how the business is going to be run

5

What is an example of a partnership?

Law Firms and accounting firms

6

What must the bookkeeper do when it comes to sole proprietorship?

include only those accounts that relate directly to the business

7

What must the bookkeeper do when it comes to Partnership

you must keep the records of the partnership separate from each of the partners personal records

8

What is a corporation?

a business owned by one or more individuals who are known as shareholders?

9

What are the shareholders responsibilities?

responsible for debts of the company is limited to the amount they invested in the company

10

What are Board of Directors?

they oversee the management of the company

11

What do Capital accounts represent?

The amount of owners equity for each partner

12

What are Drawing accounts?

are used to record the amounts withdrawn by each partner

13

What is the Income Summary Account?

is used in the closing process for transferring the balances of the revenue and expense account to the partners capital accounts

14

What are the two accounts in Shareholders Equity?

Share Capital Accounts and Retained Earnings

15

What are share Capital accounts?

they are accounts in which you would record the amount invested in the business by shareholders

16

What are Retained earnings?

used to record the net income that is retained in the business at the end of the year