Accounting · Study Guide
Key Points
Sole traders and partnerships have unlimited liability; limited companies offer limited liability protection
Only public limited companies (plc) can offer shares to the general public
Business structure determines capital account treatment and available sources of finance
Exam Focus
Distinguish between structures using liability and financing capacity as key criteria. Avoid confusing size with structure (a plc is not just a 'big Ltd').
Must-Know Terms
Cross-Theme Connections
Preparation of financial statements of sole traders
Sole trader financial statements follow distinct rules
Limited company accounts
Limited company accounting differs from sole trader accounting
Partnership accounts
Partnership accounting requires separate capital and profit-sharing accounts