Accounting II Essay Example | Topics and Well Written Essays - 2000 words

Accounting II - Essay ExampleThis form of smart set typically have unlimited life and ease of ownership transferability in addition to owners limited liability. Examples of such(prenominal) companies are Microsoft and HP (Brigham & Ehrhardt, 2008).The accounting treatment of partnership takes confederacy as an entity which is separate from partners personal personal business (Horngren, Bamber, & Harrison, 2005). The major difference in the accounting of corporations and partnership is the calculation and disclosure of the capital of the organization. Corporations are inevitable to prepare and publish audited annual and quarterly reports which could be accessed by shareholders. These annual reports contains statements including income statement, balance sheet, cash go down and changes in shareholders equity. Financial reports are not published for external users by partnership and tax bring around is submitted as part of individual tax forms. at that place are different ways of identifying whether a company is a partnership or corporation. Firstly, partnerships and corporations fall in different tax regimes. In partnership entity is not liable for tax and it is deducted from owners personal income. IRS has set out guidelines for distinguishing between partnership and corporation. In addition to the characteristics discussed above if one partner has the power to dissolve company then the characteristics of corporation is absent. Shareholders of corporations stinkpot sell their stock to third party however in partnerships there is general lack of transferability. There is also centralization of management in partnership whereas in corporations there is a board of directors which invent of companys shareholders (Brickman, 1991). What does a statement of cash flows tell us about the short and tenacious term prospects of the firm? How does an outside review use a statement of cash flows and other pecuniary statements to assess the viability of the firm?Comp anies prepare cash flow statement on a periodic substructure for