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Exam 1: Introduction to Accounting and Business

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Question 51

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Which of the following is not a characteristic of a corporation?

A) Corporations are organized as a separate legal taxable entity.
B) Ownership is divided into shares of stock.
C) Corporations experience an ease in obtaining large amounts of resources by issuing stock.
D) A corporation's resources are limited to its individual owners' resources.

E) A) and C)
F) B) and C)

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Question 52

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The accountant for Scott Industries prepared the following list of account balances from the company’s records for the year ended December 31: -Based on this information,is Scott Industries profitable? Explain your answer.

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$165,000 Fees earned + $3,000 Interest i...

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Question 53

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Assets are

The Financial Accounting Standards Board FASB is the authoritative body that has primary responsibility for developing accounting principles.

The accountant for Scott Industries prepared the following list of account balances from the company’s records for the year ended December 31: -Determine the total assets at the end of the current year for Scott Industries.

If total assets decreased by $30,000 during a specific period and stockholders' equity decreased by $35,000 during the same period,the period's change in total liabilities was a $65,000 increase.

The financial statements of a proprietorship should include the owner's personal assets and liabilities.

For accounting purposes,the business entity should be considered separate from its owners if the entity is

No significant differences exist between the accounting standards issued by the FASB and the IASB.

Identify each of the following as an 1 increase to stockholders' equity,or a 2 decrease to stockholders' equity. a. Fees earned b. Wages expense c .Dividends d. Lawn care revenue e. Investment f. Supplies expense

Proprietorships are owned by one owner and provide only services to their customers.

Two common areas of accounting that respectively provide information to internal and external users are

The unit of measurement concept requires that economic data be recorded in dollars.

An income statement is a summary of the revenues and expenses of a business as of a specific date.

The business entity concept means that

Which of the following asset accounts is increased when a receivable is collected?

Four financial statements are usually prepared for a business.The statement of cash flows is usually prepared last.The retained earnings statement RES,the balance sheet B,and the income statement I are prepared in a certain order to obtain information needed for the next statement.In what order are these three statements prepared?

Computer Corporation is starting its computer programming business and has sold stock of $15,000.Identify how the accounting equation will be affected.

Which type of accountant typically practices as an individual or as a member of a public accounting firm?

The basic difference between manufacturing and merchandising companies is the completion level of the products they purchase for resale to customers.