Explain The Three Basic Forms Of Business Organizations

o Identify and describe the three basic forms of business organizations. o What are the advantages and disadvantages of each form of ownership?

Single Proprietorship- Are entities that are owned and operated by the same individuals and is unincorporated. There are no specific laws or regulations that govern the creation and operation of this business. The advantage of this is the ability to start up is easy and requires minimal capital. A disadvantage to the owner is responsible for all the debts incurred by the business, which could hurt if one were to be litigated in any way.

Partnership- A partnership is an unincorporated business owned by two or more individuals. The agreement to engage into a partnership is usually written or verbal. Terms of the partnership are often …show more content…
o Describe what information each statement presents and which of the primary objective(s) can be met through the information presented on the statement.

The primary objective of every business is to be profitable and generate income and maintain solvency in their ability to pay debts and other obligations. The four basic financial statements that measure business goals are:

Income statement- An income statement reflects how lucrative a company is. This statement provides the net income of a period by calculating the revenue of cash into the company subtracted by expenses incurred.

Statement of retained earnings- Reflects the changes in earning of a company within a given period. The statement of retained income is generally two balance sheets reflecting the addition of net income and the deduction of dividends.

Balance sheet- Provides insight into the companies’ ability to pay debts and its financial position. The sheet lists the asset, liabilities and equity at the close of business on a specific