Business Organization and Introduction to Bookkeeping Flashcards
_______ is a business that can be owned and controlled by an individual, a company, or a limited liability partnership.
Sole Proprietorship
What are the advantages of Sole Proprietorship?
- Ease of starting and ending a business
- You’re the boss
- Retention of business profits
What are the disadvantages of Sole Proprietorship?
- Unlimited liabilities
- Limited financial resources
- Overwhelming time commitment and management difficulties
By the contract of _______, two or more people bond themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.
Partnership
What are the advantages of a Partnership
- Financial resources.
- Complementary Skills and Knowledge.
- Greater chance of survival
What are the disadvantages of a Partnership?
- Difficulty of termination
- Division of profits
- Disagreement with Partners
_______ Is created when a group of shareholders who have ownership of the corporation, are represented by their holding/acquiring of common stock.
Corporation
What are the advantages of a Corporation?
- Limited liability
- Perpetual life
- Ability to raise money
What are the disadvantages of a Corporation?
- Initial cost/Investment
- The difficulty of termination
- Double taxation
Renders service the customers to earn income
Service business
Buys merchandise and resells it to the customer.
Merchandise business
Transforming raw materials into finished products.
Manufacturing business
Transforming raw materials into finished products.
Manufacturing business
_______ is the process of recording business transactions in chronological order. _______ is done by a bookkeeper who records the day-to-day activities of a business.
Bookkeeping
_______ was regarded as the “Father of Accounting”. He also published the first book on double-entry accounting.
Luca Pacioli
_______ are exchanges of values. _______ are money, rights, properties, and services.
Transactions, Values
This method may be considered the foundation of recording.
Double-entry bookkeeping method
what are the values?
Cash
Merchandise
Service
Obligation to pay
Right to collect
Right to use
Cancellation of Debt
_______ are the transactions or an event that directly affects the operation of the business.
Business Transactions
_______ are property or rights on property owned by the business. In other words, _______ are anything of value owned by the business.
Assets
_______ are the financial obligation or debts owed to people other than the owner.
Liabilities
refers to the equity or share of the owner or owners in the property or rights on the property of the business. It is also known as proprietorship or capital.
Owner’s Equity
