Answered: Listed below are several statements…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Listed below are several statements regarding different forms of business organization. For each statement, indicate if that statement is true or false for each proprietorship and partnership.
(a)
Owners have limited liability.
(b)
Records of the business are combined with the personal records of the owner or owners.
(c)
Required to follow IFRS.
(d)
Pays income taxes on its profits.
(e)
Owners are called "shareholders."
(f)
Will have more than one owner.
(g)
Has a limited life.
(h)
Has a separate legal existence from its owners.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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