Explain and report equity accounts in unincorporated businesses.

- Proprietorships and partnerships are unincorporated forms of business organization.

- Legal and income tax laws that apply to proprietorships and partnerships differ from the laws that apply to corporations.

- The format and terminology of the proprietor equity and partnership equity section of the statement of financial position differ significantly from those used for shareholder equity.

- The determination of assets, liabilities, revenues, and expenses are similar for proprietorships, partnerships, and corporations.