Joe Has Started His One-Man Audio Consulting Business Under the Name

question 120

Multiple Choice

Joe has started his one-man audio consulting business under the name Sound Wiz. The legal structure for the company can best be described as a _____.

• A) sole proprietorship
• B) partnership
• C) trade alliance
• D) corporation
• E) benefit corporation

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Definitions:

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditure to the correct periods.

Asset Account

A financial account that represents the resources owned by a company, which have future economic value.

Liability Account

An accounting record that represents debts or obligations a company owes to others.

Cash Basis

An accounting method where revenues are recognized when received and expenses when paid, contrasting with accrual basis accounting.