19.1.1) primary advantage of the corporate form is

19.1.1)

Identify
types of businesses

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These
are the basic forms of business ownership:

Sole Proprietorship. A sole proprietorship
is a business owned by only one person. … Partnership. A business owned by two or
more individuals who share the profits and liabilities equally.Corporation.  A group of people who are authorized to act
as one entity, guided by a board of directorsForms of BusinessA business is normally organized as one of three different
forms: proprietorship, partnership, or corporation. A proprietorship is
owned by one individual. More than 70 percent of the businesses in the United
States are organized as proprietorships. It is popular to operate in this
method due to the ease and low cost of organizing. The primary disadvantage of proprietorships
is that the financial resources available to the business are limited to the individual
owner’s resources. Small local businesses such as hardware stores, repair
shops, laundries, restaurants, and maid services are often organized as
proprietorships.

As a business grows and requires more financial and managerial
resources, it may become a partnership. A partnership is owned by two or
more individuals. Like proprietorships, small local businesses such as a bakery,
music stores, salons and clothing stores may be systematically structured as
partnerships.

 

Like proprietorships, a partnership may outgrow its ability to
finance its operations. As a result, it may become a corporation. A corporation
is organized under state or federal statutes as a separate legal entity.
The ownership of a corporation is divided into shares of stock. A corporation
issues the stock to individuals or other businesses, who then become owners or
stockholders of the corporation.

 

A primary advantage of the corporate form is the ability to
obtain large amounts of resources by issuing shares of stock, which are
ownership rights in the corporation.

The Role of Accounting in Business that are organized as
corporations require large investments in equipment and facilities.  For example, Toys “R” Us has raised
over $800 million by issuing shares of common stock to finance its operations.
Other examples of corporations include General Motors, Ford, International
Business Machines (IBM), Coca-Cola, and General Electric.

About 20 percent of the businesses in the United States are
organized as corporations. However, since most large companies are organized as
corporations, over 90 percent of the total dollars of business receipts are
received by corporations. Thus, corporations have a major influence on the
economy.

 

Types of Businesses

There
are three different types of businesses that are operated for profit:
manufacturing, merchandising, and service businesses. Each type of business has
unique characteristics.

 

(19.1.2)

Discuss the Role Accounting in Business

The customers of a business are
individuals or other businesses who purchase goods or services in exchange for
money or other items of value. The goal for most establishments are to increase
profits by providing goods or services that meet customer needs. Profit is the
difference between the amount received from revenue gained from business
activities (customers for goods or services provided) that exceed expenses of
cost and taxes used to provide the goods or services.

 

(19.1.3)

 

Discuss the Importance of Ethics of Accounting
in Business

Businesses rely on accounting ethics,
policies and procedures.  Unless your managers,
investors, and creditors are extremely confident that their practices of record
keeping are consistently responsible, it may be that their accounts are exposed
to the risk of inaccuracies.   Records
may not always be consistently accurate due to human error or possibly
fraud. 

 

In the field of accounting, professional
establishments create standards of a code of ethics that are required in order
to maintain standards in accordance with state laws so that one may practice in
pertaining to the law. If laws are violated, the state code of ethics comes
with consequences of losing or suspending the establishment’s license.

 

In theory, ethical standards of
integrity are based on not simply recognizing the rules and regulations; but,
to establish a code of ethics to avoid potential conflicts that may cause
potential harm for lack of reasoning and judgment.

 

*The Key – Provide Resolutions

 

 

(19.1.4)

 

Identify
real-world opportunities for Accounting Professionals

 

 

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