Starting a Business
Business types are generally classified as either service, merchandising, or manufacturing entities. Oftentimes, however, a business may be involved in more than one endeavor such as providing a service and selling a product at the same time. As far as ownership, a business may be owned by one individual (proprietorship), by two or more persons (partnership), or by many investors (corporation).
Assume that you want to start a business; what would it be? Describe the type of business you would like to start. Would it be classified as a service, a merchandiser, a manufacturer, or a hybrid (more than one) type of business? Conduct research as needed and explain your classification. What form of ownership would you prefer? Proprietorship, partnership, or corporation? If a corporation, what type of corporation? What factors would you consider in making your determination? Research the benefits and potential drawbacks of your chosen form of ownership beyond the information provided in the textbook.
Additionally, list at least three asset accounts and three liability accounts you would expect your new business to have. Explain the purpose of each account to your specific business.
Lastly, assume you were to invest $50,000 cash into your new business venture. Present the journal entry that would be created to record this transaction. Then, show how your ownership interest would be presented in the equity section of the business balance sheet.
Be sure to post at least one reference in support of your explanations and conclusions.
