会计学原理英文Chapter01ACCOUNTINGINbusiness.pptVIP

* There are three general forms of business operations. A sole proprietorship is a business owned by just one individual. A partnership is owned by two or more individuals. Some partnerships have several thousand partners. A corporation is owned by individuals who normally are not active in the day-to-day operations of that business. For example, you may become an owner of IBM by purchasing shares of stock on the New York Stock Exchange. While you are a part owner, you do not necessarily work for IBM nor are active in the operations of the company. * Here is a key summary of some of the various aspects of our three general type of businesses. Notice that a corporation is a separate legal entity. That means it can sue and be sued in court. If you wish to sue a partnership, you must sue all the individual partners. You should also be aware that a corporation is a separate taxable entity. The income or loss from proprietorships and partnerships are taxed as income or loss to the individuals involved. A corporation has a special tax return and tax schedule. A proprietorship or partnership may be set up as a limited liability corporation, or L L C. This form of business helps protect the assets of individual owners of the business entity. * Corporate owners are referred to as stockholders or shareholders because they own shares of Owner Capital. An Owner Capital certificate serves as an ownership document for a corporation. Sometimes we refer to Owner Capital as capital stock. The two terms may be used interchangeably. Congress passed the Sarbanes-Oxley Act to help curb financial abuses at companies that issue their stock to the public. Management must issue a report stating that internal control are effective. Auditors must verify the effectiveness of internal controls. Here is a list of companies and the alleged accounting abuses. Many of these company actions lead directly to the passing of the Sarbanes-Oxley Act. * * The basic accounting equation states that asse