ACC 131 - EXAM 1 UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

ACC 131 - EXAM 1 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS

Question:
1. sole-proprietor
Answer:
- easy to start, little paperwork
- disadvantages: limited life, unlimited liability

Question:
2. partnerships
Answer:
- relatively easy to start, moderated paperwork
- disadvantages: joint and several liability, limited life, limited partnerships, limited liability partnerships,
limited liability corporations

Question:
3. corporations
Answer:
- lots of paperwork to start, limited liability
- disadvantages: double taxation

Question:
4. financing activities
Answer:
own money, borrowing, investors

Question:
5. investing activities
Answer:
buy equipment and property, big use of cash

Question:
6. operating activities
Answer:
running the business, this should generated lots of cash

Question:
7. assets =
Answer:
liabilities + owners equity

Question:
8. assets

, Answer:
things we own

Question:
9. liabilities
Answer:
things we owe

Question:
10. owners equity
Answer:
the difference between assets and liabilities

Question:
11. balance sheet
Answer:
point in time statement of assets, liabilities and owners equity

Question:
12. balance sheet heading
Answer:
Company name balance sheet date

Question:
13. current assets
Answer:
assets that will become cash or be used within 1 year examples:
- cash or cash equivalents
- marketable securities
- accounts receivable
- inventory
- prepaid expenses

Question:
14. long-term investments
Answer:
last more than 1 year examples (property, plants and equipment)
- land
- buildings less accumulated depr.
- equipment less accumulated depr.
- natural resources

Question:
15. intangible assets
Answer:
no physical substance but value copyrights, patents, tradenames, goodwill, franchises