Multiple Choice
Which of the following is the process of tracking and managing an organization's assets?
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1. Introduction to Accounting
Types of Accounting
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Which of the following best describes a voluntary agreement between two or more people in the context of accounting types?
A
A government agency
B
A corporation
C
A sole proprietorship
D
A partnership
Verified step by step guidance1
Understand the concept of a partnership: A partnership is a voluntary agreement between two or more individuals who come together to operate a business and share its profits and losses.
Compare the characteristics of a partnership with other accounting types: A government agency is a public entity, a corporation is a separate legal entity owned by shareholders, and a sole proprietorship is owned and operated by a single individual.
Recognize that a partnership involves mutual consent and collaboration between individuals, which distinguishes it from the other types listed.
Note that partnerships are governed by agreements that outline the roles, responsibilities, and profit-sharing arrangements among the partners.
Conclude that the correct answer is 'A partnership' because it fits the description of a voluntary agreement between two or more people in the context of accounting types.
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