Some one might prefer to organize his or her business as a sole proprietorship because :
- They had enough capital to fund their business by their own without the help of any investors
- They don't like to give any controls over their business to other people (which will be the case if they formed a corporation or a firm)
- They only run a small scale business
There is a high amount of possibility that the managers at Woolworth will be able to make informed decisions, if the team involved in decision-making thinks rationally, and in the best interest of the company.
<h3>What is an informed decision?</h3>
An informed decision can be referred to or considered as a decision that is taken by keeping important factors in mind while arriving at a decision, and also managing the core functions with an intention of growth.
In the condition given above, the managers will be able to make informed decisions only if their mindset towards the company is rational, and such decision is in the best interest of the company.
Therefore, the significance regarding an informed decision has been aforementioned.
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Under firm-commitment underwriting, the underwriter bears the entire risk that the shares will not be sold to the public at the specified offering price.
What is Underwriter?
Any person who assesses and takes on another party's risk in exchange for payment—which frequently comes in the form of a commission, premium, spread, or interest—is an underwriter. While underwriters work for insurance firms, agents and brokers represent both consumers and insurance companies. The mortgage, insurance, equity, and some prevalent forms of debt security trading are just a few of the financial industries where underwriters play a crucial part. Sometimes referred to as a book runner, a lead underwriter holds this position.
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The closing entry for dividends involves a debit to <u>A. Retained Earnings</u> and a credit to <u>Dividends</u>.
<h3>What is a closing entry?</h3>
A closing entry is the journal entry at the end of the accounting period so that temporary ledger accounts (mainly income statement items) are moved to permanent accounts (balance sheet items).
<h3>Answer Options:</h3>
A. Retained Earnings; Dividends
B. Dividends; Retained Earnings
C. Dividends; Dividends Payable
D. Dividends Payable; Dividends
Thus, the closing entry for dividends is a debit to Retained Earnings, which is a permanent account, and a credit to Dividends (a temporary account).
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