The major difference between the financial statements of a company and those of a sole trader or partnership is in the area of:
A) liabilities.
B) equity.
C) assets.
D) liabilities and assets.

Question

Quizplus · Accepted Answer

The major difference between the financial statements of a company and those of a sole trader or partnership is in the equity section. Companies have shareholders who own equity, whereas sole traders and partnerships have owners who own the business and its assets. This means that the equity section in a company's financial statements will include shareholder's equity, while the equity section in a sole trader or partnership's financial statements will include owner's equity. The liabilities and assets sections may also differ depending on the specific business structure, but the primary difference is in the equity section.

The Major Difference Between the Financial Statements of a Company