Chapter First, 15 questions 1. Sole, Partnership and Corporation 2. Advantages of corp: The liabilities of the owners are limited to their investment to the company. It can also raise money easily through stock market.
Disadvantages of corp: the establishment of a corp is complicate. There are usually a large amount of shareholders in a corp, and the management may act out of his or her interest instead of everyone’s interests. 3. Advantages of partnership or sole: It is much more simply to form. Owners can also make decision on their accounts. Owners get all the profit.
Disadvantages of partnership or sole: Liability is extremely high. The capacity to raise capital is limited. Owners take all the responsibilities. 4. Marketing managers, production supervisors, finance directors and company officers. Internal users with information are managerial accounting is to provide relevant and timely information for managers' and employees' decision-making needs 5. Investors, creditors, research scholars and government. 6. Financing activities: the issuance or redemption of bonds.
Investing activities: acquisition (purchase) of long-term investments, equipment used in the business and a building used in the business.
Operating activities: manufacturing, retail and service. 7. Service revenue: IS Equipment: BS Advertising expense: BS Accounting receivable: IS Common stock: IS Internet payable: BS 8. Financing activities, Investing activities, and Operating activities. They are chosen depend on the nature of transactions. 9. Retained earning is the net income retained in the corporation. Items that increase the balance: steady income, safety net and no dividend. Items that decrease the balance: net loss, dividends, prior adjustment. 10. Asset= liability+stockholder’s equity 11. an asset is an item of value owned