LSU ACCT 2000 EXAM 1 CERTIFICATION
EVALUATION SET 2026 COMPLETE QUESTIONS
AND ANSWERS
◉ What is the basic accounting equation? Answer: Assets =
Liabilities + Stockholders' Equity
◉ Which is an advantage of corporations relative to partnerships
and sole proprietorships? Answer: Reduced legal liability for
investors
◉ Which forms of business organization are considered to be
separate accounting entities? Answer: Sole Proprietorship,
Corporations, and Partnerships.
◉ Which of the following did NOT result from the Sarbanes-Oxley
Act? Answer: Tax rates on corporations increased.
◉ The payment of dividends is an example of a(n) Answer: financing
activity
◉ What kind of classification is cost of goods sold? Answer: expense
,◉ What section of cash flow statement shows the cash spent on new
equipment during the past accounting period? Answer: The
investing section
◉ If total liabilities decreased by $15,000 and stockholders' equity
increased by $5,000 during a period of time, then total assets must
change by what amount and direction during that same period?
Answer: $10,000 decrease
(Assets = Liabilities + Stockholders' Equity)
◉ Which is NOT one of the three forms of business organizations?
Answer: Creditorship
◉ Ease of transferring ownership is a characteristic of which form of
business organization? Answer: Corporation
◉ In which forms of business organization are the owners
personally liable for all the debts of the business? Answer: Sole
proprietorships and Partnerships
◉ The sole proprietorship form of business organization? Answer:
Generally, receives favorable tax treatment relative to a corporation
◉ To which of the following questions will internal users want
answers? Answer: All of the answer choices are correct.
,- what selling price for our product will maximize the company's net
income?
- which product line is most profitable?
- is cash sufficient to pay dividend to stockholders?
◉ Which of the following is NOT an external user of accounting
data? Answer: Chief Financial Officer
◉ Which statement about users of accounting information is
INCORRECT? Answer: Regulatory authorities are considered
internal users.
◉ Which of the following is the most appropriate definition of
accounting? Answer: The information system that identifies,
records, and communicates the economic events of an organization
to interested users.
◉ Paying interest expense and receiving interest revenue are
examples of Answer: Operating activates
◉ Which of the following is NOT one of the three primary business
activities? Answer: Advertising
, ◉ Which of the following is an example of a financing activity?
Answer: Issuing shares of common stock
◉ Resources owned by a business are referred to as Answer: assets
◉ In terms of the principal types of business activities, paying
salaries expense is an example of an Answer: operating activity
◉ On Jan. 10, Novis Company purchased manufacturing equipment
for $80,000 cash. What kind of activity is this? Answer: Investing
activity
◉ In what section of the statement of cash flows would the purchase
of office equipment for $10,000 cash appear? Answer: Investing
activities
◉ Which of the following is NOT one of the primary types of the
financing activities in the statement of cash flows? Answer: Buying
equipment
◉ Which of the following would NOT appear on the income
statement? Answer: Dividends paid
EVALUATION SET 2026 COMPLETE QUESTIONS
AND ANSWERS
◉ What is the basic accounting equation? Answer: Assets =
Liabilities + Stockholders' Equity
◉ Which is an advantage of corporations relative to partnerships
and sole proprietorships? Answer: Reduced legal liability for
investors
◉ Which forms of business organization are considered to be
separate accounting entities? Answer: Sole Proprietorship,
Corporations, and Partnerships.
◉ Which of the following did NOT result from the Sarbanes-Oxley
Act? Answer: Tax rates on corporations increased.
◉ The payment of dividends is an example of a(n) Answer: financing
activity
◉ What kind of classification is cost of goods sold? Answer: expense
,◉ What section of cash flow statement shows the cash spent on new
equipment during the past accounting period? Answer: The
investing section
◉ If total liabilities decreased by $15,000 and stockholders' equity
increased by $5,000 during a period of time, then total assets must
change by what amount and direction during that same period?
Answer: $10,000 decrease
(Assets = Liabilities + Stockholders' Equity)
◉ Which is NOT one of the three forms of business organizations?
Answer: Creditorship
◉ Ease of transferring ownership is a characteristic of which form of
business organization? Answer: Corporation
◉ In which forms of business organization are the owners
personally liable for all the debts of the business? Answer: Sole
proprietorships and Partnerships
◉ The sole proprietorship form of business organization? Answer:
Generally, receives favorable tax treatment relative to a corporation
◉ To which of the following questions will internal users want
answers? Answer: All of the answer choices are correct.
,- what selling price for our product will maximize the company's net
income?
- which product line is most profitable?
- is cash sufficient to pay dividend to stockholders?
◉ Which of the following is NOT an external user of accounting
data? Answer: Chief Financial Officer
◉ Which statement about users of accounting information is
INCORRECT? Answer: Regulatory authorities are considered
internal users.
◉ Which of the following is the most appropriate definition of
accounting? Answer: The information system that identifies,
records, and communicates the economic events of an organization
to interested users.
◉ Paying interest expense and receiving interest revenue are
examples of Answer: Operating activates
◉ Which of the following is NOT one of the three primary business
activities? Answer: Advertising
, ◉ Which of the following is an example of a financing activity?
Answer: Issuing shares of common stock
◉ Resources owned by a business are referred to as Answer: assets
◉ In terms of the principal types of business activities, paying
salaries expense is an example of an Answer: operating activity
◉ On Jan. 10, Novis Company purchased manufacturing equipment
for $80,000 cash. What kind of activity is this? Answer: Investing
activity
◉ In what section of the statement of cash flows would the purchase
of office equipment for $10,000 cash appear? Answer: Investing
activities
◉ Which of the following is NOT one of the primary types of the
financing activities in the statement of cash flows? Answer: Buying
equipment
◉ Which of the following would NOT appear on the income
statement? Answer: Dividends paid
