Explanation:
There are different types of businesses to choose from when forming a company, each with its own legal structure and rules. Typically, there are four main types of businesses: Sole Proprietorships, Partnerships, Limited Liability Companies (LLC), and Corporations. Before creating a business, entrepreneurs should carefully consider which type of business structure is best suited to their enterprise.
- This article will provide a quick overview of these four basic types of businesses to help entrepreneurs make one of their most important decisions.
Answer and Explanation:
The effect of each transaction is shown below:-
Accounting equation
Assets = Liabilities (+) Equity
1 Jan No effect No effect No effect
2 Jan Cash -$25,000 Notes payable $75,000
Machine +$100,000
3 Jan Cash -$1,000
Machine +$1,000
5 Jan Cash -$6,000
Machine +$6,000
Here, + sign indicates the increase in amount and - sign indicated the decrease in amount.
