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Jasmine Travis
Bus3061
Professor Jerry Thomas
July 18, 2014
1. Question 1:
Proficient-level:
Identify and describe the three basic forms of business organizations. What are the advantages and disadvantages of each form of ownership?
The three basic forms of business organizations are: single proprietorships, partnerships, and corporations.
Single proprietorships advantages- No legal formalities are necessary to organize businesses, they can manage their own business. Disadvantages- the owner is solely responsible for all debts of the business.
Partnership advantages- the same persons who own the business also manage the business, It can begin with a verbal or written agreement. Disadvantages- Each partner may be held liable for all the debts of the partnership and for the actions of each partner within the scope of the business.
Corporations advantages- you can buy stock which is units of ownership, the corporate form of business protects the personal assets of the owners from the creditors of the corporation. Disadvantages- Should the corporation fail, the owners would only lose the amount they paid for their stock, Stockholders do not directly manage the corporation.
Distinguished-level:
Business entities can also be categorized by the type of business activities they perform. Identify and describe the three types. What do all three types have in common?
The three types of business activities are:
Service companies- which perform services for a fee
Merchandising companies- which purchase goods that are ready for sale and then sell them to customers. Manufacturing companies- which buy materials, convert them into products, and then sell the products to other companies or to the final consumers.
All three of these companies produce financial statements as the final end product of their accounting process.
Question 2:
Proficient-level:
Identify the primary objectives of every business. What are the four basic financial statements that measure the primary
Bus3061
Professor Jerry Thomas
July 18, 2014
1. Question 1:
Proficient-level:
Identify and describe the three basic forms of business organizations. What are the advantages and disadvantages of each form of ownership?
The three basic forms of business organizations are: single proprietorships, partnerships, and corporations.
Single proprietorships advantages- No legal formalities are necessary to organize businesses, they can manage their own business. Disadvantages- the owner is solely responsible for all debts of the business.
Partnership advantages- the same persons who own the business also manage the business, It can begin with a verbal or written agreement. Disadvantages- Each partner may be held liable for all the debts of the partnership and for the actions of each partner within the scope of the business.
Corporations advantages- you can buy stock which is units of ownership, the corporate form of business protects the personal assets of the owners from the creditors of the corporation. Disadvantages- Should the corporation fail, the owners would only lose the amount they paid for their stock, Stockholders do not directly manage the corporation.
Distinguished-level:
Business entities can also be categorized by the type of business activities they perform. Identify and describe the three types. What do all three types have in common?
The three types of business activities are:
Service companies- which perform services for a fee
Merchandising companies- which purchase goods that are ready for sale and then sell them to customers. Manufacturing companies- which buy materials, convert them into products, and then sell the products to other companies or to the final consumers.
All three of these companies produce financial statements as the final end product of their accounting process.
Question 2:
Proficient-level:
Identify the primary objectives of every business. What are the four basic financial statements that measure the primary