Unincorporated Businesses Flashcards
What special disclosure is required for unincorporated businesses that is not required for other businesses?
It is necessary to disclose the fact that the business is unincorporated and that the statements do not include all the assets, liabilities, revenues and expenses of the owners.
How would salaries, interest or similar items which accrue to the owners of an unincorporated business be reflected in the financial statements?
<div>\n\nAny salaries, interest or similar items accruing to owners of an unincorporated business must be clearly indicated by showing such items separately either in the body of the income statement or in a note to the financial statements. If no such charges are made in the accounts, this fact mustbe disclosed in the financial statements.\n\n</div>
Should an income tax provision be reflected in the financial statements of an unincorporated business?
<div>\n\nNo provision for income taxes shouldbe made in the financial statements of businesses for which income is taxed directly to the owners (which is generally the case for an unincorporated business).\n\n</div>
\n<div>\n<p class="Paragraph">Also, one is required to disclose the fact the business is not subject to tax because its income is taxed directly to its owners.</p>\n\n</div>
What information must be provided with regard to changes in owners equity for an unincorporated business?
The financial statements of unincorporated businesses must include a statement setting out the details of the changes in the owners’ equity during the period and this statement should set out separately contributions of capital, income or losses, and withdrawals.\n<div></div>
