Pearson Edexcel IGCSE · Accounting
5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Types of business organisation.
A partnership is formed with two partners, Adams and Brown. They do not have a formal partnership agreement. During the year, Adams provides a loan of \(\$10,000\) to the business. According to the Partnership Act 1890, what is the interest rate Adams is entitled to receive on this loan per annum?
Which statement correctly identifies a difference between a traditional partnership and a Limited Liability Partnership (LLP)?
Which stakeholder group would be primarily interested in assessing the ability of a business to pay interest on loans and repay the principal amount when it falls due?
Which of the following describes the connection between Employees as stakeholders and the financial statements of a business?
A business is owned by two individuals, Alan and Brenda. They share profits and losses in the ratio of \( 3:2 \) respectively. If the business fails and the assets are insufficient to cover the debts, Alan and Brenda are personally liable for the remaining balance. Which type of business organisation is this?
Explain how employees, as internal stakeholders, use a business's financial statements to assess their future within the organisation.
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In the absence of a formal partnership agreement, explain the default provisions of Section 24 of the Partnership Act 1890 regarding interest on capital and the sharing of profits.
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State two primary reasons why an individual might choose to form a partnership instead of operating as a sole trader.
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(a) Explain two characteristics that distinguish a public sector organisation from a private sector organisation.
(b) Identify two stakeholders of a public sector healthcare provider and explain how each would use the financial statements of that organisation.
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The local government operates a public leisure centre, while a private gym operates nearby as a sole trader.
(a) Describe two characteristics of the leisure centre that identify it as a public sector organisation.
(b) Explain why the local community is considered a stakeholder for both businesses, but may have different interests in their respective financial outcomes.
(c) Discuss why the sole trader might find it more difficult to raise capital for expansion than a partnership.
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