Share
Explore BrainMass

Important information about Sole proprietorship

Your friend, Don Jones, has begun his new small business as a sole proprietorship. Comment on his choice. Is a sole proprietorship the best choice for this business? Why/Why not? What are the alternatives for Don? How does the business ownership type affect the accounting for the business?

Explain the steps in the accounting cycle.

You need to determine what the best choice is for Don. You need to describe each of the three types of businesses and should include advantages and disadvantages in your argument. Be sure that your argument is valid. You also need to comment on at least two postings.

Solution Preview

Your friend, Don Jones, has begun his new small business as a sole proprietorship

Your friend, Don Jones, has begun his new small business as a sole proprietorship. Comment on his choice. Is a sole proprietorship the best choice for this business? Why/Why not? What are the alternatives for Don? How does the business ownership type affect the accounting for the business?

Explain the steps in the accounting cycle.

you need to determine what the best choice is for Don. You need to describe each of the three types of businesses and should include advantages and disadvantages in your argument. Be sure that your argument is valid. You also need to comment on at least two postings.

Don Jones has started a sole proprietorship business. Since it is a small business it is helpful to him because of several reasons. It is the easiest to start and does not require elaborate paperwork required in other forms of business. Further, Don Jones has full control and decision making power over the business. For instance, he can decide the line of products he will sell or the supplier who will sell him supplies. Don Jones can sell or transfer his business whenever he likes. He does not need to take permission from anyone. In contrast, in other forms of business the sale or transfer will required the assent of the shareholders.

Don Jones does not have to make corporation tax payments. The income of the business is his personal income and is taxed as the personal income of Don Jones. This is a great advantage, because in case of corporations there is double taxation, when the corporation is taxed separately. Another advantage that Don Jones enjoys is that there is a minimal legal cost in forming a sole proprietorship. In other forms of business, there are large legal costs involved. Don Jones can right away ...

Solution Summary

This solution gives you a detailed discussion on Sole proprietorship.

$2.19