Accounting For Limited Liability Companies Co-operatives And Non-profit Organizations

Question 1

List features of limited liability companies.

Answer 1

1. separate legal existence
2. limited liability
3. flexibility in taxation
4. simplicity in operation

Question 2

What does limited liability mean?

Answer 2

the business owner or owners are only responsible for business debts up to the value of their financial investment in the business

Question 3

List examples of co-operatives.

Answer 3

1. Retail outlets
2. credit unions
3. utility companies
4. insurance companies
5. day cares

Question 4

Define co-operative.

Answer 4

an autonomous association of people, usually of limited means, who join together on a voluntary basis to achieve a common objective.

Question 5

What is a non-profit business?

Answer 5

a group organized for purposes other than generating profit and in which no part of the organization’s income is distributed to its members, directors, or officers.

Question 6

List features of non-profit businesses.

Answer 6

1. Main Aim is Service
2. Profit is not the Criterion
3. Surplus not Distributed among its Members
4. Separate Entity
5. Management by Elected Persons:
6. Major Funds from Contributions and Donations

Question 7

What is a public organization?

Answer 7

An institution or entity, usually controlled by the government, which provides public services for the society.

Question 8

List features of public organizations.

Answer 8

1. Government management and control….(They are completely owned by the government)
2. Public accountability: They are operated by government fund.
3. Service motive: It provides service to the public.

Question 9

What is a private organization?

Answer 9

any partnership, corporation, person, or agency that is not operated by a profit or a public body.

Question 10

What is the difference between public and private organizations?

Answer 10

In the public sector, organizations are owned and controlled by the government. Meanwhile, organizations within the private sector are owned and managed by individuals or private companies.

Question 11

List feature of private organizations.

Answer 11

1. These businesses are driven by profit.
2. The profit from private sector organisations benefits the owners, shareholders and investors.
3. They are financed by private money from shareholders and by bank loans

Question 12

State a principle of limited liability companies.

Answer 12

a limited liability company has a separate and independent legal personality from the entity of the partners

Question 13

State a principle of co-operatives companies.

Answer 13

1. Open and Voluntary Membership.
2. Democratic Member Control.
3. Members’ Economic Participation.
4. Autonomy and Independence.
5. Education, Training, and Information.
6. Cooperation Among Cooperatives.
7. Concern for Community.

Question 14

State purposes of non-profit companies.

Answer 14

1. Religious
2. Scientific
3. Public safety-oriented
4. Charitable
5. Literary
6. Sports
7. Cruelty prevention