ACCT 2000- Exam 1 Lowe-Ardoin Test Questions with Complete Answers Updated.

Sole Proprietorship - Answer - Generally owned by one person - Simple to establish - Owner controlled - Tax advantages - Personal Liability Partnership - Answer - Owned by 2 or more people - Simple to establish - Shared control - Broader skills & resources - Tax advantages - Personal Liability Corporation - Answer - Easy to transfer ownership - Easy to raise capital (selling shares of stock) - No personal liability (BIGGEST ADVANTAGE) - Pay taxes twice (corporation & stockholders) Accounting is the information system that ____________, ___________, and ________________ the economic events of an organization to interested users. - Answer IDENTIFIES RECORDS COMMUNICATES Internal Users - Answer Managers, Supervisors, Company officials External Users - Answer Investors, Creditors, Regulators Financial Scandal led to this Act - Answer Sarbanes-Oxley Act in 2002 (SOX Act) 3 Types of Business Activites - Answer 1. Financing- raising money (or borrowing)