Continuing Cookie Chronicle: Case Study Of Natalie Koebel
Continuing Cookie Chronicle October 4, 2015
By: Sobihaa Sivarasa
a) The form of business I would recommend Natalie Koebel to use for her business is proprietorship. I recommend proprietorship as the form of her business because first, she is just starting her business so, at the start it would be a small business and secondly, she is starting off as a part time business. The benefits of a sole proprietorship are they earn all profits and usually to start off the business she would only need to invest a small amount, she does not have to invest a lot of money to start off her business. The weakness is she is individually accountable for all debts in her business. The benefits in a partnership is that there is more than …show more content…
She should be able to figure out where the money is going and coming from (transactions). She should be able to know the accounting equation (assets=liabilities+ owner’s equity). She should be able to do financial statements such as an income statement, statement of owner’s equity, balance sheet, and cash flow statement. She should know this information because she has to do each statement at the end of each month. She will need this information at the end of every month. Therefore, Natalie will need accounting information.
c) Specific assets accounts that possibly can be used for Cookie Creations are cash, supplies, equipment, accounts receivable, and building. A specific liability account is accounts payable. Specific equity accounts are revenue, supplies expense, and the capital account. These are specific asset, liability, and equity accounts that Cookie Creations will possibly use to record its business transactions.
d) Natalie should open a separate bank account for the business because this way Natalie can easily see how much cash she has available for the business and it will not get mixed up with the cash in Natalie’s personal bank account. It is more effective and easier for taxes to have a separate bank account. Also, if you do not have a separate bank account there can be legal issues because personal and business affairs can get mixed up. For that reason, Natalie should open a separate bank account for the
By: Sobihaa Sivarasa
a) The form of business I would recommend Natalie Koebel to use for her business is proprietorship. I recommend proprietorship as the form of her business because first, she is just starting her business so, at the start it would be a small business and secondly, she is starting off as a part time business. The benefits of a sole proprietorship are they earn all profits and usually to start off the business she would only need to invest a small amount, she does not have to invest a lot of money to start off her business. The weakness is she is individually accountable for all debts in her business. The benefits in a partnership is that there is more than …show more content…
She should be able to figure out where the money is going and coming from (transactions). She should be able to know the accounting equation (assets=liabilities+ owner’s equity). She should be able to do financial statements such as an income statement, statement of owner’s equity, balance sheet, and cash flow statement. She should know this information because she has to do each statement at the end of each month. She will need this information at the end of every month. Therefore, Natalie will need accounting information.
c) Specific assets accounts that possibly can be used for Cookie Creations are cash, supplies, equipment, accounts receivable, and building. A specific liability account is accounts payable. Specific equity accounts are revenue, supplies expense, and the capital account. These are specific asset, liability, and equity accounts that Cookie Creations will possibly use to record its business transactions.
d) Natalie should open a separate bank account for the business because this way Natalie can easily see how much cash she has available for the business and it will not get mixed up with the cash in Natalie’s personal bank account. It is more effective and easier for taxes to have a separate bank account. Also, if you do not have a separate bank account there can be legal issues because personal and business affairs can get mixed up. For that reason, Natalie should open a separate bank account for the