Basics of Sole Propiertorship
True or false, employees can be hired to sole proprietorships.
True
true or false, you have full control over the business?
true!
what is the accounting equation?
assets= liabilities + owners equity
what is a sole propiertorship
Sole Proprietorship is a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity.
true or false, sole proprietorship takes less paperwork
true!
name 2 examples of assets
cash, inventory, accounts receivable, building, land
what are 2 examples of sole propiertorship
a local grocery store, a local clothes store, an artist, freelance writer, IT consultant, freelance graphic designer, etc
False!
name 2 examples of liabilities
accounts payable, notes payable, accrued liabilities, bonds payable
before hiring employees what must be done?
you need to get an employer identification number (EIN) from the IRS.
name 2 advantages (not using the examples already stated).
Less paperwork to get started, Easier processes and fewer requirements for business taxes, Fewer registration fees, More straightforward banking, Simplified business ownership, Complete control of your business
name 1 example of an owners equity
owner's capital, owners withdraws.
sole propiertors are liable to what?
debt accrued by the business, including lawsuits and other business obligations. If a sole proprietor owes money from a lawsuit judgment or any other debt and the business assets are not enough to cover it, creditors could go after personal assets.
name 2 disadvantages (not using the examples already stated).
Selling is more challenging, All the liability lies on you, a difficulty raising money, No liability protection,It's harder to get financing and business credit, It's harder to sell your business.
whats an owners equity?
owners claim on the assets.