Financial Accounting Theory Questions 100% sure answers
Charles_K
Financial Accounting Theory Questions
Terms in this set (22)
A business can be organised as a sole trader, partnership or
company. A sole trader business is the simplest business type, it is
a business that is owned and operated by one
person. However a sole trader business may employ more than one
person. In the eyes of the law the sole trader personally and the
sole trader's business are one
and the same and therefore a sole trader is fully personally
responsible for any losses that the business might incur. A
partnership business is one that is owned and controlled by at least
When an individual decided to two people. Most partnerships have between two and
start a business that business can twenty partners but there are examples of partnerships, for example
be organised in one of three ways. partnerships of accountants that have up to 50 partners. The
Provide a definition of each operations of a partnership business tend to be more formalised
way. and most partnership businesses will
operate under partnership agreements. These agreements set down how
important areas within the business are to be run and managed. For
example, the duties of
each partner and the ratio in which they share profits. In the
absence of such an agreement the provisions of the Partnership Act
1890 apply. A limited company is a business that is owned by its
shareholders, run by its directors and enjoys limited
liability. Limited companies can either be private or public. A
private limited company does not sell shares to the public
whereas
a public limited company does. Due to the large membership of limited
companies they tend to be large and in many cases have a multinational aspect.
, Financial Accounting Theory Questions 100% sure answers
A situation in which the owners or other shareholders of a company are not
responsible for the debts if a company fails. The limited liability
feature is one of the biggest advantages of investing in publicly
What is limited liability?
listed companies. While a
shareholder can contribute wholly in the growth of a company, his
or her liability is restricted to the amount of investment in the
company, even if it subsequently goes bankrupt and has
remaining debt obligations.
What is the accruals concept
and how does it impact upon the
preparation of a
set of financial statements?
Charles_K
Financial Accounting Theory Questions
Terms in this set (22)
A business can be organised as a sole trader, partnership or
company. A sole trader business is the simplest business type, it is
a business that is owned and operated by one
person. However a sole trader business may employ more than one
person. In the eyes of the law the sole trader personally and the
sole trader's business are one
and the same and therefore a sole trader is fully personally
responsible for any losses that the business might incur. A
partnership business is one that is owned and controlled by at least
When an individual decided to two people. Most partnerships have between two and
start a business that business can twenty partners but there are examples of partnerships, for example
be organised in one of three ways. partnerships of accountants that have up to 50 partners. The
Provide a definition of each operations of a partnership business tend to be more formalised
way. and most partnership businesses will
operate under partnership agreements. These agreements set down how
important areas within the business are to be run and managed. For
example, the duties of
each partner and the ratio in which they share profits. In the
absence of such an agreement the provisions of the Partnership Act
1890 apply. A limited company is a business that is owned by its
shareholders, run by its directors and enjoys limited
liability. Limited companies can either be private or public. A
private limited company does not sell shares to the public
whereas
a public limited company does. Due to the large membership of limited
companies they tend to be large and in many cases have a multinational aspect.
, Financial Accounting Theory Questions 100% sure answers
A situation in which the owners or other shareholders of a company are not
responsible for the debts if a company fails. The limited liability
feature is one of the biggest advantages of investing in publicly
What is limited liability?
listed companies. While a
shareholder can contribute wholly in the growth of a company, his
or her liability is restricted to the amount of investment in the
company, even if it subsequently goes bankrupt and has
remaining debt obligations.
What is the accruals concept
and how does it impact upon the
preparation of a
set of financial statements?
