Purpose of Financial Statements The objective of financial statements is to provide information about the financial position‚ performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions (IASB Framework). Financial Statements provide useful information to a wide range of users: Managers require Financial Statements to manage the affairs of the company by assessing its financial performance and position and taking important business
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Mexico. (http://sonicboomsc.com/sonichistory.html) I would have never thought that it all began as a sole proprietorship‚ a business owned and managed by one person. There is no way that Sonic would have grown as large as it has today if it had stayed that way. Today Sonic is now a successful corporation. Sonic has been through all of the basic forms of business ownership. It began as a sole proprietorship‚ then it became a partnership‚ later on it added franchises‚ and today it is a corporation. There
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Advantages of Acquiring an Ongoing Business 1. Already operational normally leads to success 2. The time and effort to start a new venture is eliminated 3. Possibility of buying an on going venture @ bargain price The next step 1. Business environment 2. Profits‚ Sales & Ratios 3. Business Assets ( Inventory‚ equipment‚ trademarks‚ goodwill) Questions 2 Ask 1. Why is the business being sold? 2. What is the current state of the business? 3. What is the current condition of the inventory
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The financial manager should examine available risk-return trade-offs and make his decision based upon the greatest expected return. False 2.Only a few financial decisions involve some sort of risk-return tradeoff. False 3.The sole proprietorship can be described as the absence of any legal business structure. True 4.In a general partnership‚ all partners have unlimited liability for the actions of any one partner when that partner is conducting business for the firm. True
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economic entity assumption An accounting principle/guideline that allows the accountant to keep the sole proprietor’s business transactions separate from the owner’s personal transactions even though a sole proprietorship is not legally separate from the owner. monetary unit assumption The monetary unit assumption is that in the long run‚ the dollar is stable—it does not lose its purchasing power. This assumption allows the accountant to add the cost of a parcel of land purchased in 2006 to the
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Chapter 1: Introduction to Financial Management What’s Ahead What Is Finance? Goal of the Firm Profit Maximization Maximization of Shareholder Wealth Legal Forms of Business Organization Sole Proprietorship Partnership Corporation Comparison of Organizational Forms The Role of the Financial Manager in a Corporation The Corporation and the Financial Markets: The Interaction Ten Principles That Form the Basics of Financial Management A Final Note on
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A) legally impossible B) politically impossible C) less difficult D) more difficult 3) A sole proprietorship is A) the easiest type of business to set up. B) the most difficult type of business to set up. C) the most expensive type of business to set up. D) the least profitable type of business to set up. 4) Which type of business is the most difficult to set up? A) sole proprietorship B) partnership C) corporation D) There is no difference in the difficulty of establishment.
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Executive Summary The main purpose of this report is to give some advices to Peter who retired as an engineer and never contact with business in the past. Through this report‚ firstly‚ you can see several forms of business organization which are sole proprietorship and partnership. Secondly‚ it will show that some background about Peter and some advices to him. Then‚ it is about introduction of accounting and benefits of an accounting system with a flow chart of a simple accounting system. Finally‚ it
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business organization is defined in the bylaws when the business is formed with the name and contact information of those who own and run the company with their roles defined. The bylaws state the purpose of the organization and what it does. A sole proprietorship does not have bylaws because one person owns and controls the business. Capital Mobilization * The purpose of the firm is to mobilize resources. Put less abstractly‚ it is to amass capital and use it to fill a specific need. A small firm
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whether or not to invest P50‚000 in a business that has pending lawsuits against it. If Pie invests and the business loses the lawsuits‚ the most Joe can lose is __________. a. P50‚000 if Joe is a general partner b. P50‚000 is Joe is a sole proprietor c. P50‚000 if Joe is a limited partner d. P50‚000 plus his share of the lawsuits if Joe is a limited partner 6. All of the following business organizations provide limited liability to their owners except: a.
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