TAMU ACCT 229 - Exam 1 With 100% Correct Answers 2024/2025

TAMU ACCT 229 - Exam 1 With 100% Correct Answers 2024/2025 3 types of businesses - answersole proprietorship, partnership, corporation unlimited liability - answersole proprietorship & partnership limited liability - answercorporation Sole Proprietorship - answerone owner advantage: easy to form separate entity for accounting purposes not a separate entity for legal purposes or tax purposes Partnership - answertwo or more owners separate entity for accounting purposes not a separate entity for legal or tax purposes Corporations - answerbusiness incorporated under the laws of a particular state. Advantages: limited liability, continuity of life, ease in transfer of stock (ownership), opportunity to raise large amounts of money by selling shares of stock to a large number of people. 3 types of business activities - answerfinancing, investing, operating Operating Activities - answereveryday activities -sell inventory, pay employees Investing Activities - answerhow you grow your company -buying building, equipment, vehicles, fixtures Financing Activities - answerhow you pay for your growth -borrow money: temporary financing -issue stock: permanent 4 financial statements - answerIncome statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows What does a balance sheet show? - answerShows the financial position of a company at a point in time. A = L + SHE Assests - answerwhat a company owns, or w