For every enterprise, the owners always interested to take the accounting information and they are very much observers of the accounting. The owners may be proprietors, partners, stockholders etc.
PROPRIETORS The proprietors are real owners of the organization. They will make the investments in the firm and they used to write all the transactions and they will not be interested to delegate such work to others. For the purpose the statutory accounting, the proprietors engaged professionals to prepare the accounts.
So in the proprietorship organizations the accounting information available with the proprietors itself and profits also with the proprietor only. The outsiders are not allowed to see the accounting information. Day to day business in their control.
It is firm combination of persons more than one invests the funds in the organization. The investment may be equally or not and the profit sharing according to the partnership agreement. In these firms, generally engage professional accountants to prepare the accounts. The partners used to get the information after completion of accounts. The outsiders are not allowed to see the accounting information other than partners. Day to day business is in their control.
The stockholders are owners of the public or private company. They will purchase the shares and become the owners of the company. The day-to-day business will not be in the stockholders control. They will not be sufficient knowledge about the business though they are the owners of the company. They used to get the information through the systematic procedure i.e. attending general meetings, applying to get the balance sheets of the company to get the accounting information etc.
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Assets = Liabilities+Owners’s equity.
The balance sheet of the enterprise always represented by the Assets and Liabilities. The Assets are represented by the liabilities. The liabilities include Liabilities and owners’s equity. Because in view of the organization, the owners capital also liability for the company. Hence there be separate treatment to pay the liabilities for current liabilities or other liabilities. The repayment of owners liability may be paid at the end of life of the organization. Hence the Liabilities+ Owners’s liability represented by the Assets is correct.
The importance difference among all is LIABILITY
In the proprietorship enterprise, the liability is unlimited; the proprietor is fully and personally responsible to pay all debts.
In case of partnership firms, the partners jointly and severally liable for the debts. Here also they are jointly, severally and personally responsible.
In Case of Corporation or Companies, the owners i.e. stockholders will have limited liability. They are not responsible for the entire debts. And their responsibility ends after payment of shares fully paid.