ACCOUNTING 200 EXAM 3 PRACTICE
QUESTIONS WITH 100% CORRECT
ANSWERS
sole proprietorship
A business owned by one person
partnership
A business owned by two or more persons associated as partners
corporation.
A business organized as a separate legal entity owned by stockholders
Corporations generally receive more favorable tax treatment than sole proprietorships and
partnerships.
False
Which is not one of the three forms of business organization?
Creditorship (Partnership, Corporation and Sole Proprietorship are forms of business
organization)
Which is an advantage of corporations relative to partnerships and sole proprietorships?
Reduced legal liability for investors
Easy transfer of ownership is a characteristic of which form of business organization?
Corporation
In which forms of business organization are the owners personally liable for all the debts of
the business?
Sole proprietorships and partnerships
The sole proprietorship form of business organization
, generally receives favorable tax treatment relative to a corporation.
Which forms of business organization are considered to be separate accounting entities?
Sole proprietorships, corporations, and partnerships
Internal users of accounting information include a company's stockholders.
False
To which of the following questions will internal users want answers?
All of the answer choices are correct.
Which of the following is not an external user of accounting data?
Chief Financial Officer
Which statement about users of accounting information is incorrect?
Regulatory authorities are considered internal users.
Which of the following did not result from the Sarbanes-Oxley Act?
Tax rates on corporations increased.
Which of the following is the most appropriate definition of accounting information?
The information system that identifies, records, and communicates the economic events of an
organization to interested users
Which of the following is required as a result of SOX?
Top management must certify the financial statements for their company.
Interest expense is classified under operating activities on the statement of cash flows.
True
Paying interest expense and receiving interest revenue are examples of
Operating activity
The payment of dividends is an example of a(n)
QUESTIONS WITH 100% CORRECT
ANSWERS
sole proprietorship
A business owned by one person
partnership
A business owned by two or more persons associated as partners
corporation.
A business organized as a separate legal entity owned by stockholders
Corporations generally receive more favorable tax treatment than sole proprietorships and
partnerships.
False
Which is not one of the three forms of business organization?
Creditorship (Partnership, Corporation and Sole Proprietorship are forms of business
organization)
Which is an advantage of corporations relative to partnerships and sole proprietorships?
Reduced legal liability for investors
Easy transfer of ownership is a characteristic of which form of business organization?
Corporation
In which forms of business organization are the owners personally liable for all the debts of
the business?
Sole proprietorships and partnerships
The sole proprietorship form of business organization
, generally receives favorable tax treatment relative to a corporation.
Which forms of business organization are considered to be separate accounting entities?
Sole proprietorships, corporations, and partnerships
Internal users of accounting information include a company's stockholders.
False
To which of the following questions will internal users want answers?
All of the answer choices are correct.
Which of the following is not an external user of accounting data?
Chief Financial Officer
Which statement about users of accounting information is incorrect?
Regulatory authorities are considered internal users.
Which of the following did not result from the Sarbanes-Oxley Act?
Tax rates on corporations increased.
Which of the following is the most appropriate definition of accounting information?
The information system that identifies, records, and communicates the economic events of an
organization to interested users
Which of the following is required as a result of SOX?
Top management must certify the financial statements for their company.
Interest expense is classified under operating activities on the statement of cash flows.
True
Paying interest expense and receiving interest revenue are examples of
Operating activity
The payment of dividends is an example of a(n)
