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Accounting for assets, liabilities, revenues, and expenses is the same, regardless of the form of business organization. The main distinction between the forms of organizations
Accounting for assets, liabilities, revenues, and expenses is the same, regardless of the form of business organization. The main distinction between the forms of organizations is found in (1) the terminology that is used to name the equity section, and (2) the accounting and reporting of the owners' investments and withdrawals. From the list provided, choose the answer that best fits for each of the three forms of business organizations.
Proprietorship | Partnership | Corporation | ||||
Equity section called: | Shareholders' equityPartner's equityOwner's equity | Partner's equityShareholders' equityOwner's equity | Partner's equityOwner's equityShareholders' equity | |||
Name of statement to report changes in equity: | Statement of Partner's EquityStatement of Owner's EquityStatement of Changes in Equity (IFRS) | Statement of Owner's EquityStatement of Changes in Equity (IFRS)Statement of Partner's Equity | Statement of Owner's EquityStatement of Partner's EquityStatement of Changes in Equity (IFRS) | |||
Investments by owners added to: | Retained earningsPartner's capitalShare capitalOwner's capital | Owner's capitalRetained earningsShare capitalPartner's capital | Owner's capitalRetained earningsShare capitalPartner's capital | |||
Profits added to: | Retained earningsOwner's capitalShare capitalPartner's capital | Share capitalPartner's capitalOwner's capitalRetained earnings | Share capitalRetained earningsPartner's capitalOwner's capital | |||
Withdrawals by owners called: | DividendsDrawings | DividendsDrawings |
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