Question

1. Question 1:
   
   • Proficient-level:
     • Identify and describe the three basic forms of business organizations.
     • What are the advantages and disadvantages of each form of ownership?
2. Question 2:
   
   • Proficient-level:
     • Identify the primary objectives of every business.
     • What are the four basic financial statements that measure the primary objectives of every business?
     • Describe what information each statement presents and which of the primary objective(s) can be met through the information presented on the statement.
3. Question 3:
   
   • Proficient-level:
     • Identify the framework for the entire accounting process and describe its components and how they fit together to form this framework.
4. Question 4:
   
   • Proficient-level:
     • To allow the accounting process to run smoothly, accountants must rely on a set of underlying concepts or assumptions. Identify and describe each of the five concepts or assumptions.
5. Question 5:
   
   • Proficient-level:
     • Many accounting transactions will apply to one or more of the financial statements. In the case of the balance sheet, multiple account types can be affected. For each of the following items, provide an example of a transaction that would have the following effects on the items in a firm's financial statements. Provide five correct responses:
       • Increase an asset; decrease some other asset.
       • Increase an asset; increase a liability.
       • Decrease retained earnings; decrease an asset.
       • Increase an asset; increase retained earnings.
       • Decrease an asset; decrease a liability.
       • Increase a liability; decrease retained earnings.
6. Question 6:
   
   • Proficient-level:
     • Consider this scenario. James Stevens was taking an accounting course at State University. Also, he was helping companies find accounting systems that would fit their information needs. He advised one of his clients to acquire a software computer package that could record business transactions and prepare financial statements. The licensing agreement with the software company specified that the basic charge for one site was USD 4,000 and that USD 1,000 must be paid for each additional site where the software was used. James was pleased that his recommendation to acquire the software was followed. However, he was upset that management wanted him to install the software at eight other sites in the company and did not intend to pay the extra USD 8,000 due the software company. A member of management stated, "The software company will never know the difference and, besides, everyone else seems to be pirating software. If they do find out, we will pay the extra fee at that time. Our expenses are high enough without paying these unnecessary costs." James believed he might lose this client if he did not do as management instructed. Discuss whether you believe this is an ethical violation.

Answer 1

Three types of business organizations are described as follows:-

1. Sole Proprietorship: - This form of business is run by single person or an individual basically referred to as sole proprietor or owner. He bears all the risk and enjoys all the profits of the business.
2. Partnership: - It is a form of business run by two or more persons who have agreed to share the profits and losses of business together. The risks and rewards are shared among the partners either equally or in the mutually agreed ratio.
3. Company: - It has its legal identity separate from its members. Members may come, members may go but a company goes on forever. This means that business of the company is not affected by the admission and retirement of members

Advantages of Sole Proprietorship;

1) It is easy to start the business and easy to dissolve.

2) All the profit belongs to a single person and all decisions are taken by the same person.

Disadvantages of Sole Proprietorship;

1) The liability of the person investing in the sole Proprietorship is unlimited.

2) There is weak management if the sole proprietor does not have complete knowledge about the business.

Partnership is defined when two or more persons joined together to share the profits and losses of the business.

Advantages of partnership;

1) The main advantage of partnership business is that it involves low cost to start the business.

2) Partnership does not have to file separate income tax return because the personal income is added in the partnership to determine the partner’s tax liability.

Disadvantages of Partnership;

1) The conflicts may arise between the partners and this may lead to dissolution of the partnership.

2) If any partner does any wrong act then all the partners will be responsible for that.

Corporation has a separate legal entity which means that it can sue and be sued.

Advantages of Corporation;

1) Liability of the shareholders is limited.

2) The capital can be raised easily because there are large numbers of shareholders who invest their money in the corporation.

Disadvantages of Corporation;

1) There are many formalities has to be completed to register the corporation.

2) The tax which is imposed on the shareholders is more because the income which is earned from the corporation is taxed separately and the personal income is taxed separately.

Note;

As there are 6 different questions and each question has parts I have answered your first question