Small Business Idea - 1521 Words

Small Business Idea ACC 561/Accounting January 30, 2012 Small Business Idea Introduction Starting a small business can be daunting, exciting, and rewarding. A proprietor must consider which form of business organization is best suited for his or her product or service. There has to be consideration with legal, tax, accounting, and other implications when selecting from the four business types. This paper will explore the advantages and disadvantages of sole proprietorship, corporation, and partnership. This paper will attempt to discuss account financial statements applicable to various forms of business, consequences associated with each form of business (e.g. legal and tax implications, and accounting implications, such as†¦show more content†¦For a corporation, tax filing is dependent on which type of business is incorporated. For a C-corporation, income and loss is taxable directly to the corporation. For an S-corporation, the tax burden can be passed onto the shareholders in the form of dividends and capital loss,† (Cheeseman, 2010, p. 567). Partnerships have to conform to â€Å"flow-through taxation: A partnership has to file an information return with the government, telling the government how much income was earned or losses were incurred by the partnership. This way, the government tax authorities can trace whether partners are correctly reporting their income or losses,† (Cheeseman, 2010, p. 535). Accounting Implications From the perspective of a manager, her or his main interest in any business entity would harbor forecasts of cash needs, projections of capital, and revenue from sales. Therefore, the income statement and balance sheet would quantify rather the organization is meeting its goals with generating capital and meeting demand of justifying cost or pricing schedule of goods and services within the organization. In an attempt to comply with Sarbanes-Oxley Act (SOX) to reduce unethical corporate behavior and decrease the likelihood of future corporate scandals, any efficient and prudent business would use guidelines outlined by the Financial Accounting Standards Board (or FASB) and SOX. As a result of FASB and SOX, â€Å"topShow MoreRelatedSmall Business Idea1156 Words   |  5 PagesSmall-Business Idea Paper University of Phoenix ACC 561 Small-Business Idea Paper There are numerous factors affecting the type of business organizations that an owner should form, so that it is most beneficial for him and the product or services provided. In this paper, the four business structures are evaluated and the association of the legal, tax and accounting implications with the different structures are also discussed. Suppose that the government has released funds to set up smallRead MoreThe Importance Of Business Ideas With Small Capital880 Words   |  4 PagesBusiness Ideas with Small Capital Filipinos are naturally creative. And it is just a waste how some would rather do nothing when they can make use of their time doing something that can help their families. Probably, one big reason that stops them from engaging themselves with worthwhile activities, such as building their own business is the lack of capital. And I do understand how some of them would rather try their luck winning the lotto instead. However, if one would really think of all the opportunitiesRead MoreEnterprise, Entrepreneurship And Intrapreneurship. Enterprise1638 Words   |  7 Pagescan use to develop a business and how a new/fresh business can help the economy and third world countries too. This report explains what can go wrong within a business and what sorts of misconceptions there are, and if they’re true or not. 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