ACCOUNTING 231 Final exam
Question and answers 100% correctly
solved 2025/2026
Which of the following is has limited liability for all owners and is not subject to double taxation?
Sole Proprietorship
Corporation
Limited Partnership
Limited Liability Corporation - correct answer ✔Limited Liability Corporation
Which of the following is the ratio for calculating the return on sales ratio?
Current Assets / Total Sales
Current Liabilities / Total Sales
Net Income / Total Stockholders' Equity
Net Income / Total Sales - correct answer ✔Net Income / Total Sales
The primary objective of financial reporting is to
provide information useful for making economic decisions.
keep businesses from going bankrupt.
determine taxable income and income tax of a business.
provide management with information needed to run the day-to-day operations of a business. - correct
answer ✔provide information useful for making economic decisions.
The Report of the Independent Auditor is the opinion of the CPA firm that examined the financial
statements of a company and states which of the following?
The financial statements are fairly presented
,The financial statements are correct as reported
The financial statements are presented fairly in accordance with GAAP.
The financial statements are free from fraud - correct answer ✔The financial statements are presented
fairly in accordance with GAAP.
The function of business responsible for providing the information used by other functional areas to
perform their jobs is referred to as:
Correct! Accounting and Information Systems
Human Resources
Production and Operations
Marketing - correct answer ✔Accounting and Information Systems
The current liquidity of a company is measured by which of the following?
Return on Assets Ratio
Current Ratio
Return on Sales Ratio
Debt to Equity Ratio - correct answer ✔Current Ratio
Which of the following is an internal stakeholder?
General Public
Correct! Management
Suppliers
Creditors - correct answer ✔Management
All of the following are external stakeholders except:
creditors
,suppliers
Correct! employees
customers - correct answer ✔employees
The Debt to Equity Ratio is measure with which of the following?
Total Stockholders' Equity / Total Liabilities
Total Liabilities / Total Assets
Correct Answer Total Liabilities / Total Stockholders' Equity
You Answered Long-term Liabilities / Total Stockholders' Equity - correct answer ✔Total Liabilities /
Total Stockholders' Equity
The accounting concept requiring that the profits of a business be determined at regular intervals
throughout the life of the business is the:
monetary unit concept
Correct! periodicity concept
going concern concept
business entity concept - correct answer ✔causes users to reach a different decision.
Which of the following is an external stakeholder in a supermarket?
the manager of the produce department
the cashier at the checkout counter
Correct! the company which supplies the baked goods for the bakery
the chief financial officer at the supermarket's corporate headquarters - correct answer ✔the company
which supplies the baked goods for the bakery
The accounting concept which assumes that, absent any information to the contrary, the business will
continue into the foreseeable future is the:
, periodicity concept
Correct! going concern concept
business entity concept
future entity concept - correct answer ✔going concern concept
The accounting concept requiring that the profits of a business be determined at regular intervals
throughout the life of the business is the:
monetary unit concept
Correct! periodicity concept
going concern concept
business entity concept - correct answer ✔periodicity concept
The accounting concept requiring that an accounting system reflect information relating only to those
economic events pertaining to a particular entity is the:
monetary unit concept
Correct! business entity concept
periodicity concept
going entity concept - correct answer ✔business entity concept
Which of the following is the ratio for calculating the current ratio?
Current Assets / Total Liabilities
Correct! Current Assets / Current Liabilities
Current Liabilities / Current Assets
Current Assets / Total Sales - correct answer ✔Current Assets / Current Liabilities
Hoxie Inc is an advertising agency and has the following data for the most recent year. Using this data
determine Hoxie's net income.
Question and answers 100% correctly
solved 2025/2026
Which of the following is has limited liability for all owners and is not subject to double taxation?
Sole Proprietorship
Corporation
Limited Partnership
Limited Liability Corporation - correct answer ✔Limited Liability Corporation
Which of the following is the ratio for calculating the return on sales ratio?
Current Assets / Total Sales
Current Liabilities / Total Sales
Net Income / Total Stockholders' Equity
Net Income / Total Sales - correct answer ✔Net Income / Total Sales
The primary objective of financial reporting is to
provide information useful for making economic decisions.
keep businesses from going bankrupt.
determine taxable income and income tax of a business.
provide management with information needed to run the day-to-day operations of a business. - correct
answer ✔provide information useful for making economic decisions.
The Report of the Independent Auditor is the opinion of the CPA firm that examined the financial
statements of a company and states which of the following?
The financial statements are fairly presented
,The financial statements are correct as reported
The financial statements are presented fairly in accordance with GAAP.
The financial statements are free from fraud - correct answer ✔The financial statements are presented
fairly in accordance with GAAP.
The function of business responsible for providing the information used by other functional areas to
perform their jobs is referred to as:
Correct! Accounting and Information Systems
Human Resources
Production and Operations
Marketing - correct answer ✔Accounting and Information Systems
The current liquidity of a company is measured by which of the following?
Return on Assets Ratio
Current Ratio
Return on Sales Ratio
Debt to Equity Ratio - correct answer ✔Current Ratio
Which of the following is an internal stakeholder?
General Public
Correct! Management
Suppliers
Creditors - correct answer ✔Management
All of the following are external stakeholders except:
creditors
,suppliers
Correct! employees
customers - correct answer ✔employees
The Debt to Equity Ratio is measure with which of the following?
Total Stockholders' Equity / Total Liabilities
Total Liabilities / Total Assets
Correct Answer Total Liabilities / Total Stockholders' Equity
You Answered Long-term Liabilities / Total Stockholders' Equity - correct answer ✔Total Liabilities /
Total Stockholders' Equity
The accounting concept requiring that the profits of a business be determined at regular intervals
throughout the life of the business is the:
monetary unit concept
Correct! periodicity concept
going concern concept
business entity concept - correct answer ✔causes users to reach a different decision.
Which of the following is an external stakeholder in a supermarket?
the manager of the produce department
the cashier at the checkout counter
Correct! the company which supplies the baked goods for the bakery
the chief financial officer at the supermarket's corporate headquarters - correct answer ✔the company
which supplies the baked goods for the bakery
The accounting concept which assumes that, absent any information to the contrary, the business will
continue into the foreseeable future is the:
, periodicity concept
Correct! going concern concept
business entity concept
future entity concept - correct answer ✔going concern concept
The accounting concept requiring that the profits of a business be determined at regular intervals
throughout the life of the business is the:
monetary unit concept
Correct! periodicity concept
going concern concept
business entity concept - correct answer ✔periodicity concept
The accounting concept requiring that an accounting system reflect information relating only to those
economic events pertaining to a particular entity is the:
monetary unit concept
Correct! business entity concept
periodicity concept
going entity concept - correct answer ✔business entity concept
Which of the following is the ratio for calculating the current ratio?
Current Assets / Total Liabilities
Correct! Current Assets / Current Liabilities
Current Liabilities / Current Assets
Current Assets / Total Sales - correct answer ✔Current Assets / Current Liabilities
Hoxie Inc is an advertising agency and has the following data for the most recent year. Using this data
determine Hoxie's net income.
