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  • Introduction To AIS Review

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    Rhea Mae Lazarte
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    Accounting provides financial information about an organization's economic activities to help with decision making. There are three forms of businesses - sole proprietorship, partnership, and corporation. A sole proprietorship offers advantages like swift decision making and complete profit ownership but has disadvantages like unlimited liability. A partnership has advantages of combined skills and moral support but uneven profit distribution. A corporation allows for easy investment and ownership transfer but is more complex with potential double taxation and agency problems.

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    Introduction to AIS review

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    Accounting provides financial information about an organization's economic activities to help with decision making. There are three forms of businesses - sole proprietorship, partnership, and corporation. A sole proprietorship offers advantages like swift decision making and complete profit ownership but has disadvantages like unlimited liability. A partnership has advantages of combined skills and moral support but uneven profit distribution. A corporation allows for easy investment and ownership transfer but is more complex with potential double taxation and agency problems.

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    6 views1 page

    Introduction To AIS Review

    Uploaded by

    Rhea Mae Lazarte
    Accounting provides financial information about an organization's economic activities to help with decision making. There are three forms of businesses - sole proprietorship, partnership, and corporation. A sole proprietorship offers advantages like swift decision making and complete profit ownership but has disadvantages like unlimited liability. A partnership has advantages of combined skills and moral support but uneven profit distribution. A corporation allows for easy investment and ownership transfer but is more complex with potential double taxation and agency problems.

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    © All Rights Reserved
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    Introduction to AIS

    Accounting is a systematic process of providing Disadvantages


    financial information about the economic Unlimited liability
    activities of an organization or unit that is Hard to raise external finance
    intended to be useful in making economic Higher tax rate
    decisions Poor decision making
    Organization or Unit Distribution of profit may be uneven
    - This is business itself.
    Three (3) forms of businesses:
    Corporation
    o Sole proprietorship
    o Partnership Advantages
    o Corporation Easy to invest in
    Three (3) operations of businesses: Easy to sell ownership
    o Service Tax efficiency
    o Merchandising (retaining) Provide jobs/wages
    o Manufacturing Disadvantages
    Double taxation
    More compliance
    Sole proprietorship
    Difficult to form
    Advantages
    Agency problem
    Swift decision-making,
    Confidentiality,
    Complete ownership of profits
    Less paperwork
    Easier tax setup
    Disadvantages
    Lack of resources,
    Unlimited liability
    Personal liability
    Limited business life
    Time demands

    Partnership
    Advantages
    Combined business skills and knowledge
    Division of work
    Moral support
    New perspective
    Easier formation

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