ACCT 201 Principles of Financial Accounting Practice Exam - Chapter 1 Accounting Information for Business Decisions Dr. Fred Barbee Solution to Short-Problem #3

3.

The characteristics below apply to at least one of the forms of business Is a separate legal entity Is allowed to be owned by one person only. Owner or owners are personally liable for debts of the business. Is a taxable entity. Is created by a charter form a state or the federal government. Is the most common of all types of businesses. May have a contract specifying the division of profits among the owners. Owner or owners are not personally liable for debts of the business. Has an unlimited life

Use the following format to indicate (with a "yes" or "no") whether or not a characteristic applies to each type of business organization.

	Proprietorship	Partnership	Corporation
a.	No	No	Yes
b.	Yes	No	Yes
c.	Yes	Yes	No
d.	No	No	Yes
e.	No	No	Yes
f.	Yes	No	No
g.	No	Yes	No
h.	No	No	Yes
i.	No	No	Yes