Description
Purpose of Assignment
The purpose of this assignment is to help students gain a better understanding of the importance of the appropriate legal business categories and financial statements as a key management tool for making decisions.
Assignment Steps
Develop a 1,050-word evaluation describing business structure and financial statements, including the following:
- Identify and describe the legal categories of a business organization contrasting tax-related advantages and disadvantages.
- Next, using your entrepreneur skills, consider starting your own business. What business structure would you choose and why?
- Discuss financial statements for the chosen business structure, then explain with specific examples from the University Library, how these would help you make decisions about your business.
Cite a minimum of two peer-reviewed references.
Format your paper consistent with APA guidelines.
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Running head: BUSINESS STRUCTURE AND FINANCIAL STATEMENTS
Business Structure and Financial Statements
Student’s Name
Professor’s Name
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BUSINESS STRUCTURE AND FINANCIAL STATEMENTS
Business Structure and Financial Statements
A business structure can be defined as a category that is recognized by law to
which an organization may belong (Scarborough, 2016). For business owners and
potential business owners, business structures are a vital aspect of their daily activities
because they determine how the business is to operate and the returns to expect thereof as
per the business’ financial statements (Scarborough, 2016). Financial statements are also
important as they enable the business keep records regarding the business performance
and enable easier financial management as the areas that need attention can easily be
spotted on the financial statements of the business (Scarborough, 2016).
Legal categories of a business organization
Legally, there exist several categories of business organizations. They include
corporations; which can be regular corporations, S corporations, non-profit or
professional corporations, limited liability companies, sole proprietorships and
partnerships (Traynor, 2007).
A sole proprietorship is a business that is owned by only one individual regardless
of the size of the business. The major tax advantage of the sole proprietorship is that tax
is paid th...
