LSUS MHA 706 FINAL LORD COMPREHENSIVE
REVIEW AND STUDY GUIDE
◉ Primary role of finance.
Answer: is to plan for, acquire, and utilize resources to maximize the
efficiency (and hence value) of the enterprise.
◉ The Four C's.
Answer: cost minimization
cash sufficiency
capital access
control of financial resources
◉ 3 categories of business organizations.
Answer: proprietorship, partnership, and corporation (there are
also hybrid forms)
◉ Advantages of Proprietorships and Partnerships.
Answer: ease of formation, subject to few regulations, and no
corporate income taxes.
◉ Disadvantages to proprietorships and partnerships.
, Answer: limited life, difficult to transfer ownership, unlimited
liability, difficult to raise capital
◉ Advantages to corporations.
Answer: unlimited life, easy transfer of ownership, ease of raising
capital
◉ Disadvantages of corporations.
Answer: cost of formation and reporting and double taxation for
investor-owned corporations
◉ Limited liability partnership LLP.
Answer: ◦Partners share general business liability, but partners are
liable only for their own malpractice actions
◉ Limited liability company LLC.
Answer: Members are taxed like partners
and Liability like stockholders
◉ Professional corporation (PC) or professional association (PA).
Answer: Owners have benefits of incorporation. However, still liable
for malpractice. Often used by individual clinicians.
REVIEW AND STUDY GUIDE
◉ Primary role of finance.
Answer: is to plan for, acquire, and utilize resources to maximize the
efficiency (and hence value) of the enterprise.
◉ The Four C's.
Answer: cost minimization
cash sufficiency
capital access
control of financial resources
◉ 3 categories of business organizations.
Answer: proprietorship, partnership, and corporation (there are
also hybrid forms)
◉ Advantages of Proprietorships and Partnerships.
Answer: ease of formation, subject to few regulations, and no
corporate income taxes.
◉ Disadvantages to proprietorships and partnerships.
, Answer: limited life, difficult to transfer ownership, unlimited
liability, difficult to raise capital
◉ Advantages to corporations.
Answer: unlimited life, easy transfer of ownership, ease of raising
capital
◉ Disadvantages of corporations.
Answer: cost of formation and reporting and double taxation for
investor-owned corporations
◉ Limited liability partnership LLP.
Answer: ◦Partners share general business liability, but partners are
liable only for their own malpractice actions
◉ Limited liability company LLC.
Answer: Members are taxed like partners
and Liability like stockholders
◉ Professional corporation (PC) or professional association (PA).
Answer: Owners have benefits of incorporation. However, still liable
for malpractice. Often used by individual clinicians.
