Business

Business

1.Identify the pros and cons of the partnership as a form of ownership.

There are various forms of business with several advantages and disadvantages. These forms of business include Sole Proprietorship, Partnership and Corporation. At a modest level, Sole Proprietorship and Partnership are most commonly used form of business. Following are the advantages and disadvantages of Partnership.

A single individual or person may have a limited capital, wile in partnerships, partners can pool capital and run the desired business. In partnership, the business can also use managerial skill of other partners. The profit and loss are also pertinent to the amount or share of each partner. However, partnership could also give way conflicts. The profit is distributed among the partners and no one alone is its beneficiary (Nottonson, 2007).

On the other hand, sole business owner also have some advantages and disadvantages. Probably the most significant advantage of Sole Propretorship is that no foundation is required for minimum capital. An individual can take free and instant decisions on his own and take the responsibility of these decisions. It also avoids conflicts with other shareholders. The sole proprietor may also use 100% of the profits for their own purposes.

As the name suggests, only one person at the helm of the company is to meet all the issues. The company management is thus dependent solely on the qualifications of the owner. The owner is liable with his business and personal assets. Thus, the company wages is not to be claimed as a business expense and therefore, are not deductible.

2.Discuss funding options for small businesses.

The ideal option of financing for small businesses is to borrow money from the bank. It is the easiest form of financing for small businesses, because banks could easily be approached and small businesses could easily get their desired capital from banks. In partnerships, a business could also be financed by borrowing from a friend or a partner. However, small businesses do not have the option to issue bonds or raise equity in the stock exchange, because it requires a strong base, huge regulation and high initial cost. This route is only viable for large Corporations (Green, 2003).

3.Determine and discuss how managerial accounting can help managers with product costing, incremental analysis, and budgeting.

Cost management system is an essential tool for enterprise management. One of the main elements of business efficiency is to find measures for reducing cost. Tool for achieving the stated goals is management accounting, the classical formulation of which is directly related to cost management.

Creating a cost management system makes it possible to achieve the strategic direction of the decision-making in the management of costs. It provides a clear explanation of control objects and the reasons for the appearance of certain types of costs and provides different approaches to manage them. Planning is aimed at forestalling the adverse effects of changes in the external environment of business.

There are several measures used by Accountants to find the costing of various products and services of a ...