U1A2 Assignment Templateupdated2022 (1)
.docx
School
Sir Wilfrid Laurier Collegiate Institute**We aren't endorsed by this school
Course
ACOUNTING BAF3M1
Subject
Accounting
Date
Dec 29, 2024
Pages
2
Uploaded by AgentSteelDuck38
BAF3M (2012): Financial Accounting Principles (2012), Grade 11, Unit 1: Introduction to AccountingActivity 2: GAAPs and Forms of Ownership AssignmentName: Tristan BrunneAnswer the following questions in the space provided. 1.What does GAAP stand for?Answer: GAAP stands for Generally Accepted Accounting Principals.2.Why is it necessary to have GAAPs (at least 2 reasons)?Answer: GAAPS allow investors to maintain faith in the financial markets, without them it would be difficult to trust given information. GAAPS allow investors to better analyze and compare companies, with consistent comparable information. GAAPS make a company’s financial health clear to the investor.3.Complete the chart for the advantages and disadvantages of each form of business ownership.Forms of BusinessOwnershipAdvantages(cells will expand)Disadvantages(cells will expand)Sole Proprietorship1. Easy and inexpensive setup.2. Full control by owner.3. Easy to report taxes.4. Owner gets 100% of profits.1. Owner liable for everything.2. Hard to raise money for business.3. Owner takes on all the debt.4. Often difficult to sell.Partnership1. The risk of the business is shared.2. You won’t have to manage on your own.3. Reporting taxes is also easy (No corporate tax return).4. Business can be more enjoyable with a partner and costs are shared.1. There can be conflict between partners.2. Both partners can be held responsible for one of their decisions.3. Legal conflict between partners (Buyouts).4. Lack of accountability and work ethic in either partner.
Corporation1. Owners of the corporation aren’t as liable as partners or sole proprietors.2. Many investors, making it easy toraise capital.3. Maybe required when conducting business with the government.4. Income generated by the business maybe paid in salaries or dividends to allow for a better tax situation.1. This type of business is very expensive to set up and to maintain. 2. Lots of paperwork when it comesto paying taxes.3. Less control over everything, investors often have a say in the operation.4. Corporations are difficult to form and require investors to start up.Save this file with the file name U1A2 and submit to the correct Dropbox.