INTRODUCTION TO ACCOUNTING

Assignment #1

Problem Set 1

Instructions

For each of the following descriptions, decide if the business has been formed as: a

proprietorship, a partnership or a corporation.

1. This business is responsible for its debts and paying taxes on its profits.

2. This business is owner by one owner.

3. This business is often used for service-type businesses such as lawyers and accountants.

4. This business offers its owners limited liability.

5. This business is a separate legal entity from its owners.

6. This business has two or more owners and has unlimited liability.

7. Ownership of this business is easily transferred from one owner to another.

8. This business has a single owner who pay income tax on the profit of the business.

9. This business has the best chance of having a long life.

10. This business is usually the easiest form of organization to set up.