Financial Accounting Chapter 1

 

 

 

 

 

 

 

 

 

 

Chapter 1 Summary

• Accounting helps translate economic activity of an org to internal and external users.

• Proprietorship

• Owned by one person

• Limited life

• Unlimited Liability

• Responsible for income tax

• Partnership

• Owned by more than one person

• Limited life

• Each partner has unlimited liability

• Responsible for income tax

• Corporations

• Separate legal entity owned by shareholders

• Indefinite life

• Ease of raising capital

• Limited liabilirt

• Entity pays income tax

• Public or private

• Public has to can IFRS

• Private can choose from ASPE or IFRS

• Types of Business Activity