LSU ACCT 2000 EXAM 2 FINAL PAPER 2026
QUESTIONS WITH FULL SOLUTION GRADED
A+
◉ Sole proprietorship. Answer: Business owned by one person
◉ Partnership. Answer: 2 or more persons associated as partners
◉ Corporation. Answer: Separate legal entity owned by stockholders
-investors receive shares of stock to indicate their ownership
◉ Why are stocks more attractive?. Answer: They are easy to sell
◉ Advantages of sole proprietorship:. Answer: -Simple to establish
-Full control
-Tax Advantage: only pay taxes on income once
◉ Advantages of partnership:. Answer: -Easy to establish
-Broader skills and recourses
-Tax advantages
,◉ Advantages of corporation:. Answer: -Easy to transfer ownership
-Easy to raise capital= can sell stock cheaply
-No personal liability= most you lose is your share in stock
◉ Disadvantages of sole proprietorship:. Answer: Liable for debts
and legal obligations of business
◉ Disadvantages of partnership:. Answer: Liable for debts and legal
obligations of business
◉ Disadvantages of corporation:. Answer: Higher tax rates
>>corporations do their own tax returns and pay stockholders back
in dividends
◉ Define accounting:. Answer: The information system that
identifies, records, and communicates the economic events of an
organization to interested users
◉ 2 types of users of accounting:. Answer: Internal and External
◉ Examples of internal users:. Answer: Managers, production
supervisors, finance directors, company officers
,◉ Examples of external users:. Answer: Creditors (lend-bankers)
and investors (stockholders)
◉ What does effective financial reporting depend on?. Answer:
Ethical
◉ An accountants job is to select the most ____ alternative.. Answer:
ethical
◉ 3 types of business activities:. Answer: Financial activities,
investing activities, and operating activities
◉ The 2 primary sources of outside funds:. Answer: -Borrow money
-Issue shares of stocks
◉ When you borrow money, the amounts are called:. Answer:
Liability
◉ Party to who amounts are owed are:. Answer: Creditors
◉ Are notes payable and bonds payable the same types of
liabilities?. Answer: No
, ◉ What supports the check when you owe someone money?.
Answer: Notes payable and bonds payable
◉ Issuing shares of stock are only for what type(s) of business
organization(s)?. Answer: Corporation
◉ Payments to stockholders are called:. Answer: Dividends
◉ What are investing activities?. Answer: The purchases of
resources a company needs in order to operate
Ex: computers, delivery trucks, furniture, buildings
◉ Resources owned by a business are called:. Answer: Assets
◉ Revenue. Answer: Amounts earned from the sale of a product
◉ Inventory. Answer: Goods available for sale to customers
◉ Accounts receivable. Answer: Right to receive money from a
customer, in the future, as a result of a sale
Ex: gardener bills the client and receives money in future
◉ Expenses. Answer: Cost of assets consumer or services used
QUESTIONS WITH FULL SOLUTION GRADED
A+
◉ Sole proprietorship. Answer: Business owned by one person
◉ Partnership. Answer: 2 or more persons associated as partners
◉ Corporation. Answer: Separate legal entity owned by stockholders
-investors receive shares of stock to indicate their ownership
◉ Why are stocks more attractive?. Answer: They are easy to sell
◉ Advantages of sole proprietorship:. Answer: -Simple to establish
-Full control
-Tax Advantage: only pay taxes on income once
◉ Advantages of partnership:. Answer: -Easy to establish
-Broader skills and recourses
-Tax advantages
,◉ Advantages of corporation:. Answer: -Easy to transfer ownership
-Easy to raise capital= can sell stock cheaply
-No personal liability= most you lose is your share in stock
◉ Disadvantages of sole proprietorship:. Answer: Liable for debts
and legal obligations of business
◉ Disadvantages of partnership:. Answer: Liable for debts and legal
obligations of business
◉ Disadvantages of corporation:. Answer: Higher tax rates
>>corporations do their own tax returns and pay stockholders back
in dividends
◉ Define accounting:. Answer: The information system that
identifies, records, and communicates the economic events of an
organization to interested users
◉ 2 types of users of accounting:. Answer: Internal and External
◉ Examples of internal users:. Answer: Managers, production
supervisors, finance directors, company officers
,◉ Examples of external users:. Answer: Creditors (lend-bankers)
and investors (stockholders)
◉ What does effective financial reporting depend on?. Answer:
Ethical
◉ An accountants job is to select the most ____ alternative.. Answer:
ethical
◉ 3 types of business activities:. Answer: Financial activities,
investing activities, and operating activities
◉ The 2 primary sources of outside funds:. Answer: -Borrow money
-Issue shares of stocks
◉ When you borrow money, the amounts are called:. Answer:
Liability
◉ Party to who amounts are owed are:. Answer: Creditors
◉ Are notes payable and bonds payable the same types of
liabilities?. Answer: No
, ◉ What supports the check when you owe someone money?.
Answer: Notes payable and bonds payable
◉ Issuing shares of stock are only for what type(s) of business
organization(s)?. Answer: Corporation
◉ Payments to stockholders are called:. Answer: Dividends
◉ What are investing activities?. Answer: The purchases of
resources a company needs in order to operate
Ex: computers, delivery trucks, furniture, buildings
◉ Resources owned by a business are called:. Answer: Assets
◉ Revenue. Answer: Amounts earned from the sale of a product
◉ Inventory. Answer: Goods available for sale to customers
◉ Accounts receivable. Answer: Right to receive money from a
customer, in the future, as a result of a sale
Ex: gardener bills the client and receives money in future
◉ Expenses. Answer: Cost of assets consumer or services used
