TAMU ACCT 229 - Exam 1 questions with correct answers

3 types of businesses CORRECT ANSWER sole proprietorship, partnership, corporation unlimited liability CORRECT ANSWER sole proprietorship & partnership limited liability CORRECT ANSWER corporation Sole Proprietorship CORRECT ANSWER one owner advantage: easy to form separate entity for accounting purposes not a separate entity for legal purposes or tax purposes Partnership CORRECT ANSWER two or more owners separate entity for accounting purposes not a separate entity for legal or tax purposes Corporations CORRECT ANSWER business incorporated under the laws of a particular state. Advantages: limited liability, continuity of life, ease in transfer of stock (ownership), opportunity to raise large amounts of money by selling shares of stock to a large number of people. 3 types of business activities CORRECT ANSWER financing, investing, operating