Free Sample Essays > Accounting
Accounting - Small Business
VCE Accounting Unit 1
Starting a small business
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1. Define a small business.
A small business is a usually owned by one or two owner, these owner manage and controls the business. The business usually consists of 20 or less employees.
2. What is the difference between a sole trader and a partnership? What are two advantages and two disadvantages of a sole trader and a partnership?
Sole trader is a business owned by the one owner whereas a partnership is where two or more owners own the business and the share is spread among the owners. The advantages of a partnership includes a greater amount of money being used while can help them to increase the quality of services and goods. The flexibility of having one owner and therefore it gives the other owners the chance to take time off, so that he or she won’t have to worry about his or her business as there are other owner helping to look after the business, also the workload is spread.
Some disadvantages included unlimited liabilities, which can cause company failure. Many disagreements concerning the running of the business.
The advantages of sole trader included the ability to make your own decisions and therefore giving you all the control and decision-making. This also limits the liabilities. Disadvantages includes the huge amount of responsibilities which the owner holds this enable the owner to have too much flexibility.
3. Expert PC Repairs Pty Ltd is a local small business that repairs computers. What do the letters Pty Ltd tell you about the business? What are two advantages and two disadvantages of starting your small business as a company?
The letter Pty Ltd stands for Proprietary Limited, this means that the business is a private company. Starting a small business have many advantages and disadvantages. Some advantages included having full control of the company with mean that your are able to make your own decisions without having to go through the whole process of having to go though lots of people before making the decision. It is also easier to start with a much lower cost. Disadvantages includes the lack of skills and experiences, a risk of failure as ypou have no idea if the business will be successful.
4. What is a service business? List three examples of small service businesses that you know.
A service business is where you pay and in exchange they provide you with business. Some examples of service business includes hair dressers, lawyers and electricians.
5. What is a trading business? List three examples of small trading businesses that you know.
A trading business is where you pay money in exchange you receive goods.
Some example of small trading business includes, milk bars, clothing shops and florist.
6. What is an e-commerce business? List three examples of e-commerce businesses that you know.
An e-commerce business is where the trading is done on the internet where you pay by card and receive good. Some [next page]