ADM 1340 Chapter Notes - Chapter 1: Financial Statement, Accounts Receivable, Income Statement
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25 Apr 2016
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ADM 1340 Full Course Notes
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No legal distinction between the business as an economic unit and the owner. Business profits are reported as self-employment income and taxed on the owner"s personal income tax return. For accounting, the business records of the proprietorship must be kept separate from those related to owners personal activities. Follows the reporting entity concept which requires that the economic activity that can be identified with a particular company be kept separate and distinct form the activities of the owner and of all the other economic entities. Also followed by other forms of business. Business owned by two or more people. Separate legal entity whose shares provide evidence of ownership. Can be public (open to purchase by general public) or private (shares are closely held) Common set of guidelines, which can differ depending on the form of business organization, that are used to record and report economic events.
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Related Questions
Match Column A with Column B
1) Partnership | a) a business owned by one person who is personally liable for all losses |
2) Proprietorship | b) An artificial being created by a state |
3) Limited partnership | c) two or more persons combine their efforts for a single transaction |
4) Corporation | d) created when shareholders elect to be treates as partners for tax purposes |
5) legal capacity | e) created by an agreement between two or more persons who agree to share profits and losses |
6) buy-and-sell agreement | f) provides for compensation to a deceased or withdrawing owner of a business in return for that owners interest. |
7) Subchapter S corporation | g) the ability of an organization to sue or to own property |
8) joint venture | h) exists when some partners are treated like shareholders for liability purposes |
9) limited liability company | i) tax doctine that allows income to be taxed at the owner level, not the organization level |
10) "pass through" | j) owners recieve limited liability and tax treatment as if they were a partnership without filing as a corporation. |