Accounting Test 1 the Accounting Test 1 2026 Updated practice exam
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Study online at https://quizlet.com/_fg52bi
1. What is account- Accounting is the process of identifying, measuring, recording, and communi-
ing cating economic information for effective decision making.
2. Two types of External Users and Internal Users
users that use ac-
counting
3. External users ex- Investors, Creditors, Analysts, Regulatory Bodies
amples
4. Internal users ex- FInance Directors, Production and Marketing
amples
5. Three types of sole proprietorship, partnership, corporation
business organi-
zations
6. What is a Sole Pro- A business owned by one person who bears all of the risks and rewards associ-
prietorship ated with ownership.
7. Percentage of 70%
businesses are
sole proprietor-
ship
8. Pros of Sole Pro- •Easy to set up
prietorship •Owner controlled
•Easily formed/dissolved at will of owner
•Tax advantage: individual tax rates
9. Cons of Sole Pro- Personal Liability
prietorship Financing more difficult
Hard to transfer ownership
, Accounting Test 1 the Accounting Test 1 2026 Updated practice exam
Download
Study online at https://quizlet.com/_fg52bi
10. What are partner- A business owned by two or more people
ships
11. Examples of part- small businesses and private practices like law and physicians
nerships
12. Pros of a partner- Easy to set up
ship Shared control
Increased access to financial resources andskills
Tax advantage: pass through entityIndividual tax rates
13. Cons of partner- Personal Liability for partners
ship Hard to transfer ownership: automatically dissolved when one partner leaves
14. What is a corpora- Separate legal entity ("person") owned by stockholders in the form of stock
tion
15. Who makes the the state
laws for corpera-
tions
16. Privately held cor- Ownership is not available to the general public
poration defini-
tion
17. Publicly held cor- Ownership is available to the public at large, usually on the public exchange
peration defini-
tion
18. Pros of corpera- Greater potential to raise capital
tions Lower legal liability
Ownership easily transferred
19.
Download
Study online at https://quizlet.com/_fg52bi
1. What is account- Accounting is the process of identifying, measuring, recording, and communi-
ing cating economic information for effective decision making.
2. Two types of External Users and Internal Users
users that use ac-
counting
3. External users ex- Investors, Creditors, Analysts, Regulatory Bodies
amples
4. Internal users ex- FInance Directors, Production and Marketing
amples
5. Three types of sole proprietorship, partnership, corporation
business organi-
zations
6. What is a Sole Pro- A business owned by one person who bears all of the risks and rewards associ-
prietorship ated with ownership.
7. Percentage of 70%
businesses are
sole proprietor-
ship
8. Pros of Sole Pro- •Easy to set up
prietorship •Owner controlled
•Easily formed/dissolved at will of owner
•Tax advantage: individual tax rates
9. Cons of Sole Pro- Personal Liability
prietorship Financing more difficult
Hard to transfer ownership
, Accounting Test 1 the Accounting Test 1 2026 Updated practice exam
Download
Study online at https://quizlet.com/_fg52bi
10. What are partner- A business owned by two or more people
ships
11. Examples of part- small businesses and private practices like law and physicians
nerships
12. Pros of a partner- Easy to set up
ship Shared control
Increased access to financial resources andskills
Tax advantage: pass through entityIndividual tax rates
13. Cons of partner- Personal Liability for partners
ship Hard to transfer ownership: automatically dissolved when one partner leaves
14. What is a corpora- Separate legal entity ("person") owned by stockholders in the form of stock
tion
15. Who makes the the state
laws for corpera-
tions
16. Privately held cor- Ownership is not available to the general public
poration defini-
tion
17. Publicly held cor- Ownership is available to the public at large, usually on the public exchange
peration defini-
tion
18. Pros of corpera- Greater potential to raise capital
tions Lower legal liability
Ownership easily transferred
19.
