Accounting for Business

Accounting for Business

Introduction
Accounting is essential to operating a company because it allows you to monitor revenue
and expenses, ensure regulatory compliance, as well as provide comprehensive financial details
to shareholders management, as well as the regulator that could be used to make corporation
decisions (Connolly and Jackman, 2017). The study mainly evaluates key sources of external
long-term finance for sole trader business, partnership firm, private companies and listed public
companies.
Main Body
Task
Evaluation of different long term external financial sources:
Sole Traders:
Hire Purchase
Sole trader could buy an asset via hire purchases by spending a portion of purchase price
like down payment as well as leasing the remainder before full payment is received. On sales of
equipment or related assets, hire buy arrangements are often applicable.
Banks' Mortgages and Lines Of credit
Sole trader may apply for loan from banks or other financial institution. A commercial
loan credit line, personal loans, cash advances, as well as a mortgage are all examples of this.
Sole proprietorship choose trade credits and credit facilities because they do not need a mortgage
on the business properties. Sole trader's trade receivables are usually used to obtain trade credit.
Sale and Lease Back
Whereas if sole proprietorship has no other their assets to sell, then he can want to sell asset or
properties and then lease this back from buyer. This allows him to keep his current business
name as well as carry on with regular operations while collecting money for expanding.
Assets are being sold (Khan, 2015).
When sole trader's personal resources as well as retained earnings are depleted and additional
investment in company is needed, may decide to selling some his properties. This may be a land
that is mentioned under the company's name. A independent contractor could rent a workplace
and use proceeds from sale to broaden his enterprise.
Private Limited companies:
Venture Capital: Often private companies need venture capitalists' assistance when they are only
getting started. Venture capitalists examine the enterprise in depth to assess its growth prospects.