What are the three forms of Business Organizations Answer th

What are the three forms of Business Organizations? Answer the following Accounts: (A)Asset (L)Liability (SE)Stockholders\' Equity 1. Cash 2. Common Stock 3. Accounts Payable 4. Rent Expense 5. Sales or Revenue 6. Accounts Receivable What is the first financial statement to be prepared? What are the three Activities of a Business? Financial Accounting provides information for decision makers primarily inside or outside the entity? What are the Rules of Accounting called? Write the Accounting Equation? Can it be written another way?

Solution

The three forms of business organizations are Sole proprietorship, Partnership, and a Corporation.

1. Cash – (A)

2. Common stock – (SE)

3. Accounts payable – (L)

4. Rent expense – (SE)

5. Sales or Revenue – (SE)

6. Accounts receivable – (A)

The first financial statement to be prepared is the Income Statement.

The three activities of a business are Operating activities, Investing activities, and Financing activities.

Financial Accounting provides information for decision makers primarily outside the entity such as shareholders, creditors, etc.

The Rules of Accounting are called the Generally Accepted Accounting Principles or GAAP for short.

The Accounting Equation is typically written as:

Assets = Liabilities + Stockholders’ Equity

It can also be written in two more ways as under:

Liabilities = Assets – Stockholders’ Equity; or

Stockholders’ Equity = Assets - Liabilities