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1. If there was one owner of a manufacture company. What accounts are risky? 2. Would...

1. If there was one owner of a manufacture company. What accounts are risky?

2. Would you make a journal entry if the owner didn't pull out a salary, but did work?

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Answer #1

1.)If the accounts are maintained under sole proprietorship it is very risky although the owner can enjoy all the profits of the the manufacture company but any losses or debts arising from the company have to be paid by the owner and if the debt still prevails after selling the assets of the company then sole owners personal assets are to be used to pay out the debts which make sole proprietorship very risky.He may start it as a one person company or a company defined as per the companies Act

2)If the owner had worked and no salary is withdrawn no journal entry should me made as there is no financial transaction happening .

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