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Capital and Marginal Utility Assignment

   

Added on  2020-04-13

15 Pages2918 Words74 Views
Running head: ACEDEMIC SKILLS FOR ACCOUNTANTS Academic Skills for AccountantsName of the StudentName of the UniversityAuthor note

1ACADEMIC SKILLS FOR ACCOUNTANTSTable of ContentsTask 1...............................................................................................................................................3Task A..........................................................................................................................................3Type of organization................................................................................................................3Partnership organization and its types.....................................................................................4Different types of partnership..................................................................................................5Task B..........................................................................................................................................5Private limited Company.........................................................................................................5Public limited company...........................................................................................................6Public organization..................................................................................................................7Private organization.................................................................................................................7Task 2...............................................................................................................................................8Task A..........................................................................................................................................8Marginal Utility.......................................................................................................................8Law of diminishing marginal utility........................................................................................8Importance of the law............................................................................................................10Task B........................................................................................................................................11Price Elasticity of Demand....................................................................................................11References......................................................................................................................................14

2ACADEMIC SKILLS FOR ACCOUNTANTSTask 1Becky and Becker intend to start a business with their joint contribution of capital andmarginal ability. As they are planning to make joint contribution in starting a business, a limitedliability partnership (LPP) organization is most suitable for them. The limited liabilitypartnership is the one where liability of partners are limited by the capital limit. This issue isbriefly discussed considering the types of business organization especially consideringpartnership organization and their advantages and disadvantages. Task AType of organization The business organizations are mainly of three types- Sole Proprietorship, Partnershipand Corporation. Sole Proprietorship is a business where a single person owns the business. Herethe single owner takes all business decision. There is no obligation on the owner to consult withanyone regarding location selection, hiring decision and selling decision. Another advantage isthat the owner enjoys the entire profit. However, the owner has to bear all the business risk. Inthe partnership business, there are more than one owner (Foss and Loasby 2013). The partnersmake their contribution in business and enjoy profit shares as per their share of capitalinvestment. In partnership business, the partners based on the terms of contract share both profitsand losses. Corporation is a legal organization owned by different shareholders. This type oforganization may have only one shareholder or even thousands of shareholders.

3ACADEMIC SKILLS FOR ACCOUNTANTSPartnership organization and its types Partnership business is defined as a business where there are two or more owners. The setup for the partnership business depends on the deed of partnership. The Deed of partnershipcontains the capital amount that each partners should contribute called the starting cash, terms ofcontract for sharing profit or loss (Wheelen and Hunger 2017). Regulation for incorporating newpartners, ending partnership and regulating the business when one partner leaves. Advantages of Partnership The partnership business runs with several advantages. The main advantage of partnership is thatin bad times of the business, all of its partners share risks. The debt burden for individual is lesswhen burdens are shared among the partners than in times of sole proprietorship (Cohen 2017).The additional effort and investment of the partners help in business expansion. Partnershipbusiness opens room for new skills and ideas brought by the partners. The string associationamong the partners help to gain credibility and confidence of buyers and suppliers. Disadvantages of PartnershipIn addition to several advantages, there are some disadvantages of partnership organization. Theprofit is shared among the partners and hence, each receives a small share of profit. Larger thenumber of partners smaller is the profit share (Brooks 2015). In the presence of partners, eachindividual has less control over the business decision. Disputes are often found to exist amongthe partners regarding the workload, profit distribution and this hampers the performance of thebusiness.

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