ACCOUNTING LYCEUM
  • Home
  • CAPE® Suggested Solutions
  • CSEC® Suggested Solutions
  • Tutorials & Tips
  • Home
  • CAPE® Suggested Solutions
  • CSEC® Suggested Solutions
  • Tutorials & Tips
Search
Cape Accounting

     Suggested Solutions

Unit 1: May 2011, Question #2(b)

3/5/2018

0 Comments

 
Only one (1) benefit for each type of business entity was required, however for the sake of expanding students' knowledge, three (3) benefits are listed for each below.
  1. Benefits of operating as a proprietorship:
  • Easy to set up.
  • Ownership is easily transferable. The sole trader can sell or transfer ownership at their discretion.
  • No bureaucracy in the decision making process as the business is owned and controlled by one individual.
 
     2. Benefits of operating as a partnership:
  • Partners can share the responsibility of managing the organization which can go a long way to ease the burden usually associated with a proprietorship where there is only one person responsible for managing the entity.
  • There is an opportunity to raise more capital when compared to a proprietorship.
  • The partnership will benefit from synergy as each partner will bring their own set skills, experience, knowledge and contacts to business, potentially giving it a better chance at success than a proprietorship.
 
     3.  Benefits of operating as a company/corporation:
  • It is fairly easy for a company to raise larger capital amounts through the sale of shares.
  • The shareholders, who are the owners of the company, enjoy limited liability as they only stand to lose what they have invested in the company.
  • Corporations enjoy continuity as most businesses continue to operate after the death of the owners as shares are very easily transferable.

     4.  Benefits of operating as a non-governmental organization (NGO):
  • NGOs can usually access government funding in the form of grants.
  • NGOs are no liable to pay taxes.
  • NGOs are not required to publish their financial statements. This significantly reduces the expenses of this type of entity when compared to a company/corporation that is required to publish financial statements.
I hope that you found this proposed solution helpful! If you did please share it! Also, feel free to ask any questions or to comment below. Best of luck!
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Author

    The author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor.

    Archives

    May 2018
    April 2018
    March 2018
    February 2018
    January 2018

    Categories

    All
    Unit 1: Adjusting Journals
    Unit 1: Business Structures
    Unit 1: Capital And Reserves
    Unit 1: Contingencies
    Unit 1: Partnerships
    Unit 1: Ratio Analysis
    Unit 1: SOFP And SOCI
    Unit 1: Statement Of Cashflows
    Unit 2: Classification Of Costs
    Unit 2: Job Costing
    Unit 2 Manufacturing Accounts
    Unit 2: Marginal Vs Absorption Costing
    Unit 2: Remunerations
    Unit 2: Traditional Vs Activity Based Costing

    RSS Feed

Powered by Create your own unique website with customizable templates.
  • Home
  • CAPE® Suggested Solutions
  • CSEC® Suggested Solutions
  • Tutorials & Tips