all-of-the-following-are-sustainable-methods-businesses-can-use-to-raise-capital-funding-except-for-

Question

All of the following are sustainable methods businesses can use to raise capital (funding) except for
________.
A. borrowing from lenders
B. selling ownership shares
C. profitable operations
D. tax refunds

Puneet Prajapati · Accepted Answer

Okay, So let&#x27;s understand our current solution through lover example. Okay, let&#x27;s suppose we have Mr A. Okay, So what, Mr. A is thinking that he is willing stocked godman business More specifically, we can see a painter&#x27;s so start government business know what happens. Mr. A is also short offers. You can write it down, which I am, you know, going go out right now on the sheet. Okay, so Mr is also short offers. However, his friend Mr B has asked Mr A various types of methods glorious forms. Okay. Know what happens out of such current betters as other questions also specifies which is not a sustainable method off raising the forms for a business. So Mr BCE&#x27;s this is the naval mattered. Is one rich gifts sufficient as villas? Sir Danity who? Who receives such parties? Okay, what? Mr Bees is that the ferns which are going to be raised toe any type off method or begins a true any type of medium. First of all, it should be sufficient. And second, it should be sucking. Okay, Now, out of the options available, bitter potion has asked us then which of the falling is not a sustainable mattered off raising funds. So back city for we will discuss the attacks in France by that. So because it is the most appropriate choice out of victory out of the current available options. Okay, so tax difference are basically the mountains which are checked. Expert is likely to receive from tax authorities. Okay, let&#x27;s suppose you haven&#x27;t come off $100,000. Now you have to pay tax to the government. Now, you have already deposited the checks, which is more than the liability you have towards the government in respect of Texas. So it is very likely that you are You&#x27;re going to receive the tax difference because you have deposited Oh, great. A remote, then your liability. Okay, But what happens when when the government assesses your tax liability and doesn&#x27;t think differently? Okay, there isn&#x27;t a desert. There is a natural tendency of a person over taxpayer. We can see natural tendency is to avoid Texas. So the government will work against that. So the government assesses the experience liability. As for the act, but in some other directions also like that experience may avoid some income sources to include income in their tax assessment. So the tax authorities really do that will go back. Okay, so Texas for text defends on so they are not sufficient. First of all there, nor sufficient they&#x27;re nor sufficient by that. So because it maybe around do mostly very ready. It made a change to $50,000 that&#x27;s all. And that&#x27;s and that will be not sufficient for a business who get funded at the initial stage. Okay, why? They&#x27;re so because at the initial stage, it is very likely that for the initial five years, the business is going to make loss even if and more specifically by that by that happens because the business does not get the required number of crimes who started the business also. So that is very $50,000 with Lord or maybe can say $100,000 will not being a force. Okay. And it also depends on business to business case business to business case like what type of business you are going to start. Okay. Also did is not ready sub danity as to received off text difference by that. So because it may happen that it already faces some some of these shoes in processing the difference. Or maybe a much time greater than required time. As for the or local regulations. So your text different? May God believe? Okay. Now, if you&#x27;re willing to start the business in one month and if your text difference are going to be sure after six months, then it&#x27;s very likely that there is, you know, very, very lasted less that entity that you will get your text So it is not a sustainable mattered off fundraising. Okay, so the correct choice for problem is day exit points. Okay, that&#x27;s all for our solution. Thank you.

Puneet Prajapati · Answer

Okay, So let&#x27;s understand our institution. Before moving on to the solution, we will understand accounting question which will help us to understand the choice which we designate as the correct answer. So what? I would probably Okay, So what? This intercom vanquishing? I&#x27;m writing the six with the green bin so that you can get up. Your idea. What are the six? I&#x27;m writing the laboratories with the red pen. Did you know the green? The green color signifies work, and the doctor signifies what? And the blue collar signifies something. It&#x27;s OK. Okay. No, let&#x27;s understand. Let&#x27;s suppose you have a business off selling video games to customers. Okay? No. What happened? Whenever you will sell the video games or CDs or any type of hard right? Always the beans could be downloaded and played by the Children. The agency, that they will pay you off later like environment or to want. So what happens when that even happens? The recoverable amount from the customers become your assets. Okay, so let&#x27;s suppose you have sold video games off 10,000 daughters. Okay, but what of that? Over the six month beard. Know what happens? Thank you. Ju also you do not produce the video games or series or David is whatever type on your one You purchased them from outside the country or outside the answer of your state. Okay? No. What? No. What happens if you have purchased them? So you have to pay off them also? Yeah, you&#x27;re supplying Also. But when you have purchased the video games initially from the supplies you also pull your supplies that you will pay off them later. Like in fundamental to month. Whenever you will get your payment from your from the parents who have purchased the video games from you. So you have purchased material or we can sit purchase video games. Initially, all five get help. My good owners, That&#x27;s ready. Here now let&#x27;s come Toe owner&#x27;s equity. Now what will happen to owners Equity? It will come to $5000. Is that clear? Okay, why? They&#x27;re so 5000. Be ok. Be First of all, let&#x27;s the understood the meaning of the sex. The recoverable amount. Okay. It denotes the recoverable amount from the customers. What? 5000 denotes $5000 notes The papal amounts to the suppliers. OK, which we have to pay in future. What if $5000 here the owners increases that. It is the take of it from business. Okay, it is the take of it from business. Know what happens? It is the amount of which will be taken away by owner of the business through their homes. Okay. Know what happens? What? You can think that which I don&#x27;t or which type off items will be included in orders equity. So we can say that take of a is a more like profit and loss. It is very clear, because if the in vote the business, what business owner makes and then business owner makes profit or loss, that&#x27;s all. Okay, so what do you think? Either the profit will increase the owner&#x27;s equity or lost will increase donors. Of course, the profit will increase the owner&#x27;s equity. Okay, If the you know, if that recoverable amounts are more than the table a moans, then the prophet will increase. And like vice the or security will increase. So let&#x27;s like there would. That&#x27;s a supposed a this perfect and owner&#x27;s equity. Oh, this is not a new one. We will understand that works what happened and get somebody else scenario. Okay? The profit entity, the profit and the profit increase. As so, it will increase the owner&#x27;s equity if loss increases. This will degrees the owners okay by that. So in the end by that so because at the end, the business owners will either make profit or loss. Okay, But when will. But when he will make profit so over secretive off testing, please. Okay. However, if the larger increase like, let&#x27;s suppose some parents say said that we will not be off, we will not pay you environment or Tumen. They will pay you in running out or two years or even not paying the amount. Okay, because we didn&#x27;t like the games. Okay, so what should happen? In that case, the business would have been make losses because it has purchased these really begins from the supplier. But he has not been able to recover that long against the perhaps sold on the periods. So it in that case, it will incur loss so it will decrease the owner&#x27;s equity. So we have, like, double solution. What is the solution or what is the correct choice for have a problem? Is the losses that this choice be OK? The losses they have seen that whenever they will be lost or were they never lost will increase the owner&#x27;s equity will decrease. Okay, please. Like now. Set sheet. One shake toe. Okay. For your better Vivian. However, the solution is Joyce be okay. That&#x27;s all for our solution. Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand that What is the actual meaning off government agents? They very well know that. What is the actual meaning of government? However we&#x27;ve been dealing get up Meaning off into reverse. You win establishment, which has a sole purpose. Who saw the various needs for safety through the collection off because it revenue strong the public info. Yeah. Mexes these energy. Okay, so what? We have guard in our definition. First of all, it has. It is an establishment. Okay, which has a soul but was to serve the various needs off society. Or so we can also deride the meaning that it does not has the government. A government agency does not ask any purpose to only profit. Okay, but how does it solve the needs of the society through the collection? Off big, particularly new from the public. Inform off axis fees. Impolitic. Oh, sorry. It&#x27;s more so I will get. I will give you a better example to understand this definition, however you will you need to write this definition so that you can get the idea that how our example is going. Let&#x27;s use a force. There is a government agency G company. Okay, so what? It does you eggs? It collects the revenue. It collects the taxes, Benedetti on income off every person. Okay. It was in case off a a Mr Lead. So it is g complicity covering backsies. Maybe on income off mystery. Know what, Mr. So what is the response will be articulating the revenues from the public. It has to establish established that sources which wouldn&#x27;t need society needs. Okay, because this very clearly in four days the society needs that. Just understand this infested ship bridge Heidi&#x27;s. Okay, box. The Ming schools that make hospital says head gear. Okay. Has given safe be education. Various, various, this let this list is not exhaustive. Okay? But however, you can get a sense in that part of the basics writing needs. So now what is the sole purpose of this G country collecting Texas from Mr. Okay, I&#x27;m establishing the various sources, which will mean the society needs Okay, So from this, we can we have the right of a solution. So the correct choice for our problem is be okay in B enjoys B. What is the option? ISI, using X performs, who service the needs of this exciting. Okay, So this is the solution for our given problem based on the analysts we have just discussed. Okay, We have just seen you. Will. You can also brought this diagram so that you can get clarity that what is the definition we have created on? First page is saying Okay, but however acting confuse it. And that was it for me. We have a solution as Joyce. Be okay. That&#x27;s all for the solution. Thank you.

Jiapeng Guo · Answer

This is problem six from Chopper Chop. So this sucks Woods While happened If corporate&#x27;s income tax induces business to reduce their capital us um, investment. So on. The best way to answer this question is to, ah to refer back the textbook, so we should look at to the text case study in Chapter Tough. Who pays the co operating income tax. And this is kind off the hard question to answer right? And it&#x27;s hard to define. But the economy&#x27;s tohave one agreements, and so people pay all Texas. So we need to figure out who are those people. And we just continue to, ah, reading the materials. And I hope we can get an answer from that and the this kid started, give our, ah, give over one Give us. One example says the US government decided to raise the tax on there on the income earned revising company. So by intuition, this text herds the owners off the current complex. Why? Because they need to pay actually cooperate income tax so on they will receive less profit. And this seems reasonable. But over the time this honors well, response to the text they don&#x27;t want to do their money, right? So and also see no producing cars is life&#x27;s profitable. So they were your vice. The life in building new car companies instead, off they want they while in vice there wealthy other ways, for example, Bye by buying large hace swore by building factor raising other countries or other countries, other industries or other countries, you mean one word. They won&#x27;t put their money on producing cars, so this leads lots of bad consequences. And one consequence is that the price off course well, raise right, well increase and the wage. The auto auto walker also worked the auto worker on the workers wage well, go down. So this two consequences actually bear the burden off Texas Off off the actually incorporates income tax. So when we are looking back to the answers, it seems number. See, the answer scene makes the most sense, right, because it&#x27;s ice worker spear. Some off the burn off the Texas and the is true rights because the wish well going down and the the increasing the decrease in part off their way to actually compensate. So there&#x27;s calm compensates. This is a compensation off actual income. Actual cooperates. So actually see car preteen context. So see, is our answer

Puneet Prajapati · Answer

So let&#x27;s start over. Current solution. OK, so who can be the user Sofa? Comping information. Okay, use this off. Accounting information. So what is that sounding information? It is. It refers to the collection off data in respect of the transaction which an NDP enders with. Okay, with other entities. Okay, we will understand in much greater did a little pigs to little days. I wouldn&#x27;t divide it first of all investors, let&#x27;s suppose you are willing to start a business. But you are. You are very, very short off first. No work. You would know what will happen. You will go to your investors. You will go to the market to raise the capital from different types of investors that investors will demand the company information statement of financial position from you that please show that please show us your statement. Often insult financial position. Okay. Like national statement. Bellen She&#x27;d income income statement that how much profit do you have been running for the past five years? Okay, assess your profit and loss capacity. Okay? A sense your profit generating capacity was this your production capacity. So investors will likely to use your accounting information so that they can very well repair that. How much funds should be a located your business out of their portfolio? Also, there are government agencies which team are or we can say, which require your accounting information. Who says that whether you are working in social interest in part like you may be a very off you know, very well practiced laying down in, You know, companies act like corporate governance like, What does it tell it tells that the company should be Show yourself the purpose. Also, Psychlos, like begins example off conducting campaigns by the companies in their local regions off health checkups. Okay, health facility type and distributing medical insurance. A scholarship to ST James. Okay, so these types off. So these types off for millions. His check that whether the company is conducting social campaigns are working, incorporate gold in Syria or not. Okay. Also, the other employees off course employees will have a greater sense off accounting information by there, so because they&#x27;re working in the organization, they will have a very sense off. You know, every type of area in which the operation walking are willing to work like you begin sick clients. That revenue expenses. Okay, the locations off the company is the company Money National John Stash. Never. OK, employees. We left every type of accounting information allergic to the cup. No date is of one gang ticketea business competitors. So accounting information, however, accounting information off any type of company. But far but forgiven solution. It is a private company. Every company means it is not Mr Dunn Stock Exchange. So what is the difference between private and public company? A public company is is mandated to be listed on stock exchange, and every dive of information related to public company will be available to everyone. Everyone means even its company desserts. But we&#x27;re tough private companies concerned. Diamond Company is not listed on the stock exchange and its financial information. And every type of information is very, very less disclose toe every person. What? I mean that the information little private company will be available in less disclosing terms to anyone like it will be available to investors. It will be available to court media and sees it will be available to its employees. Also put business where the business computer comes. Okay. The information of private companies will not be available will not be easily available to its Tom Peters because such information is very, very comprehension. Okay, It&#x27;s not like that. Then it is a private come that anyone working in a private company steals that out information and passes business computer. So that is a very rare kiss. And we&#x27;re talking in general terms, less specific. I guess so. The available off accounting information off a private company will not be available for business. Okay, so whatever pushiness Oster&#x27;s and we have derived our solution, the correct choice. Four problem? No, is be okay. Link computers. The founding information allergic to private companies, will not be available to its competitors operating in the same industry. Okay, so that&#x27;s all our solution. You can write this example in your notebook so that you get a better sense or as villains. Clarity off the caution has been a solution. We have just arrived. All shake number two. Okay, that&#x27;s all part of a solution. Thank you.

Puneet Prajapati · Answer

Okay, so like this. So let&#x27;s understand the financial statement users. Okay, so there are two tapes. They proved himself an interesting rich users. So the banks on interest rate mentions which we can categorizing accident. So I&#x27;m going to write excellent users, right with that a thing because they are outside of the entities so that it will be more gator, do you that? Yeah. Upstaters outside it for an organization. So what? Type off. What? Papal abuses. We have instant uses skeptically. Let&#x27;s see that. Okay, Most of all investors, Okay, like equally share investors differentiating misters and that and many more. Okay, banks okay. Of legs like that to suppose if companies listed on the stock exchange so the public or we can say more specifically than the white category of investors will demand higher interest rate went from the entity. Okay. And that is up. Gourmet vacancy. So these are the These are the users of these. Other was defined that external use category, which are outsiders or the organization. Would you be mine definition state? Maine&#x27;s okay from the entity so that they connect upon them based on the relevant requirement. Okay. Internal users. What what they comprise off employees. Okay. Oh, not oh, we can say managers. So the so employs owner managers in all 30 mine financial statement of you claims from the entity to assess that where the company is heading to assess that medical beings heading on the on it straight. All we can see onto in a very, very business terminology that hoke in that How much the companies making a profit in dreary girls. So these are the categories we have off users are interest rates. No Asperger given, no problem. The correct what? It sees the external users of financial accounting from issue, including all of the foreign. Except so the correct choice for the problem. Yes. What employs? Okay, Because employees that because implies our Internet years off one inches d It&#x27;s OK, that is We have understood, You know, that letters never being issues they it is they didn&#x27;t use of captivity. So that is right. The correct choice would be a problem, missy. Okay. Thank you.

Problem

The accounting information of a privately held co…

Problem 14 Hard Difficulty

All of the following are sustainable methods businesses can use to raise capital (funding) except for
________.
A. borrowing from lenders
B. selling ownership shares
C. profitable operations
D. tax refunds

Answer

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Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting