Please find the attached files and let me know if any questions rise.PLEASE READ CAREFULLY
– Please use APA (7th edition) formatting
– All questions and each part of the question should be answered in detail (Go into depth)
– Response to questions must demonstrate understanding and application of concepts covered in class,
– Use in-text citations and at LEAST 2 resources per discussion from the school materials that I provided to support all answers. Include at least 2 references and include in-text citations.
– Responses MUST be organized (Should be logical and easy to follow)
Minimum 1.5 Page
Discussion 1 – Organizational Forms of Business
Suppose a group of accountants wanted to start their own accounting company. What are the various organizational forms of business they could choose? Describe the strengths and weaknesses of each model. Give your recommendation of which model would be best suited for a group of accountants and WHY?
In which organization type is it easiest or most difficult to raise money? Explain the advantages and disadvantages as a borrower or from the perspective of the lending institution.1
Choose Your Business Structure comprises public domain material from The U.S. Small Business Administration.
UMGC has modified this work.
Choose Your Business Structure
Sole Proprietorship
A sole proprietorship is the simplest and most common structure chosen to start a business. It is an
unincorporated business owned and run by one individual with no distinction between the business and
you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses
and liabilities.
Forming a Sole Proprietorship
You do not have to take any formal action to form a sole proprietorship. As long as you are the only
owner, this status automatically comes from your business activities. In fact, you may already own one
without knowing it. If you are a freelance writer, for example, you are a sole proprietor.
But like all businesses, you need to obtain the necessary licenses and permits. Regulations vary by
industry, state and locality. Use the Licensing & Permits tool to find a listing of federal, state and local
permits, licenses and registrations you’ll need to run a business.
If you choose to operate under a name different than your own, you will most likely have to file
a fictitious name (also known as an assumed name, trade name, or DBA name, short for “doing business
as”). You must choose an original name; it cannot already be claimed by another business.
Sole Proprietor Taxes
Because you and your business are one and the same, the business itself is not taxed separately-the sole
proprietorship income is your income. You report income and/or losses and expenses with a Schedule C
and the standard Form 1040. The “bottom-line amount” from Schedule C transfers to your personal tax
return. It’s your responsibility to withhold and pay all income taxes, including self-employment and
estimated taxes. You can find more information about sole proprietorship taxes and other forms at
IRS.gov.
Advantages of a Sole Proprietorship
• Easy and inexpensive to form: A sole proprietorship is the simplest and least expensive business
structure to establish. Costs are minimal, with legal costs limited to obtaining the necessary
license or permits.
• Complete control. Because you are the sole owner of the business, you have complete control
over all decisions. You aren’t required to consult with anyone else when you need to make
decisions or want to make changes.
• Easy tax preparation. Your business is not taxed separately, so it’s easy to fulfill the tax
reporting requirements for a sole proprietorship. The tax rates are also the lowest of the
business structures.
Retrieved from : https://leocontent.umgc.edu/content/dam/course-content/tus/finc/finc-331/document/ChooseYourBusinessStructure.pdf
2
Disadvantages of a Proprietorship
• Unlimited personal liability. Because there is no legal separation between you and your
business, you can be held personally liable for the debts and obligations of the bRetrieved from
https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/modules/finc330/m1-
module-1/s3-commentary.html
————————————————————————————————————
Module 1: Finance and Financial
Performance
Topics
Introduction to Financial Management
Standard Financial Reporting
Evaluating Financial Performance
Financial Plans and Forecasts
Because it introduces the field of finance, the material in this module covers an unusually wide
spectrum of financial subjects, ranging from the definition of finance to the evaluation of
financial performance using ratio analysis.
Introduction to Financial Management
In this section, we address three important subjects in financial management. First, we critically
examine the question of what is the proper goal of the firm. Second, we examine the key
interactions between the firm and the various market entities. Third, we discuss some of the
generally recognized fundamental principals of financial management that form the foundations
of financial management analyses and decision making.
The Goal of the Firm
To measure the financial performance of a firm, it is necessary to establish a fundamental goal
against which to evaluate financial performance and financial decision making. In determining a
“proper” financial goal for the firm, three essential requirements should be satisfied. First, the
goal must be theoretically sound; second, it must be quantitative; and third, it must be easy to
apply in practice.
A review of current economic and business theory reveals two potential goals for a firm.
Traditional economic theory espouses maximizing profit, and modern finance theory advocates
maximizing shareholder wealth. Logically, there can be only one goal for evaluating financial
performance, therefore we must examine each proposed goal against the above-listed
requirements to determine which is superior.
https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/modules/finc330/m1-module-1/s3-commentary.html
https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/modules/finc330/m1-module-1/s3-commentary.html
https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/modules/finc330/m1-module-1/s3-commentary.html#I
https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/modules/finc330/m1-module-1/s3-commentary.html#II
https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/modules/finc330/m1-module-1/s3-commentary.html#III
https://leocontent.umgc.edu/content/umuc/tus/finc/finc331/2228/modules/finc330/m1-module-1/s3-commentary.html#IV
In comparing our two candidates, it is apparent that both goals are quantitative and relatively
easy to measure and apply in decision making. The profit maximization goal would be
quantitatively measured based on accounting profit—total revenues generated less total costs
incurred. The goal of Chapter 2 “Financial Statements, Taxes, and Cash Flow” from Finance by Boundless is used under
the terms of the Creative Commons Attribution-ShareAlike 3.0 Unported license. © 2014,
boundless.com. UMGC has modified this work and it is available under the original license.
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iChapter 1 “Introduction to the Field of Financial Management” from Finance by Boundless is used under
the terms of the Creative Commons Attribution-ShareAlike 3.0 Unported license. © 2014, boundless.com.
UMGC has modified this work and it is available under the original license.
C
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fi
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be
n
ef
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ia
lf
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or
ga
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w
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of
m
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s
w
h
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ti
m
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so
im
p
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fi
n
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ce
:
1.
T
im
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va
lu
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o
f
m
o
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e
y:
F
or
a
n
u
m
be
r
of
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s,
m
on
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to
d
ay
is
w
or
th
m
or
e
th
an
th
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sa
m
e
am
ou
n
t
of
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on
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in
th
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fu
tu
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or
ex
am
p
le
,y
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w
ou
ld
ra
th
er
h
av
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$
10
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to
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ay
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an
$
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in
10
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ar
s
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m
on
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m
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w
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.
2.
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k:
M
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in
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rn
.
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