Acct 2010 Exam 1 Questions with
Verified Solutions
three types of organizational forms - ANSWER-sole proprietorship
partnership
corporation
one owner
owner liable for all debts
all p/l part of taxable income - ANSWER-sole proprietorship
2+ people
more resources
more expensive - ANSWER-partnership
describes how profits are shared, how it would change if partner added/ loss -
ANSWER-partnership agreement
% of organizations - ANSWER-LLC-6%
P-4%
Corp-18%
SP-72%
separate entity from both legal and accounting
corp legally responsible for taxes and debts
owners only lose what they invested
raise money using shares - ANSWER-corporation
owners have a claim on the amounts that contributed directly to the company in
exchange for stock certificates - ANSWER-contributed capital
claim on amount the company has earned through profitable business operations -
ANSWER-retained earnings
earned by selling goods and services to customers - ANSWER-revenue
all costs of doing business that are necessary to earn revenues - ANSWER-expenses
R-E - ANSWER-net income
, increase in net income - ANSWER-increase in stockholder equity
income statements
statement of retained earnings
balance sheets
statement of cash flows - ANSWER-financial statements
reports the amount of revenues less expenses for a period of time - ANSWER-income
statement
results of business actives reported in an appropriate monetary unit - ANSWER-unit of
measure assumptions
accumulate and report the effects of each different business activity - ANSWER-
accounts
net income and distribution of dividends affected the financial position of the company
during the period - ANSWER-statement of retained earnings
reports amount of assets, liabilities, and stockholders equity of a business - ANSWER-
balance sheets
reports indicating increase of decrease in cash - ANSWER-statement of cash flows
operating
investing
financing - ANSWER-part of statement of cash flows
running business to earn profit - ANSWER-operating
buying, selling productive resources with long lives, purchasing investments, lending -
ANSWER-investing
borrowing from bank, repaying loans - ANSWER-financing
is company generating enough cash to make payments on loans
does the company have enough assets to cover its liabilities - ANSWER-creditors
interested in assessing
ensure companies produce financial information that is useful in making decisions -
ANSWER-generally accepted accounting principles(GAAP) and IFRS
relevant and faithful representation
comparable, verifiable, timely, understandable - ANSWER-info must be two things
four things
Verified Solutions
three types of organizational forms - ANSWER-sole proprietorship
partnership
corporation
one owner
owner liable for all debts
all p/l part of taxable income - ANSWER-sole proprietorship
2+ people
more resources
more expensive - ANSWER-partnership
describes how profits are shared, how it would change if partner added/ loss -
ANSWER-partnership agreement
% of organizations - ANSWER-LLC-6%
P-4%
Corp-18%
SP-72%
separate entity from both legal and accounting
corp legally responsible for taxes and debts
owners only lose what they invested
raise money using shares - ANSWER-corporation
owners have a claim on the amounts that contributed directly to the company in
exchange for stock certificates - ANSWER-contributed capital
claim on amount the company has earned through profitable business operations -
ANSWER-retained earnings
earned by selling goods and services to customers - ANSWER-revenue
all costs of doing business that are necessary to earn revenues - ANSWER-expenses
R-E - ANSWER-net income
, increase in net income - ANSWER-increase in stockholder equity
income statements
statement of retained earnings
balance sheets
statement of cash flows - ANSWER-financial statements
reports the amount of revenues less expenses for a period of time - ANSWER-income
statement
results of business actives reported in an appropriate monetary unit - ANSWER-unit of
measure assumptions
accumulate and report the effects of each different business activity - ANSWER-
accounts
net income and distribution of dividends affected the financial position of the company
during the period - ANSWER-statement of retained earnings
reports amount of assets, liabilities, and stockholders equity of a business - ANSWER-
balance sheets
reports indicating increase of decrease in cash - ANSWER-statement of cash flows
operating
investing
financing - ANSWER-part of statement of cash flows
running business to earn profit - ANSWER-operating
buying, selling productive resources with long lives, purchasing investments, lending -
ANSWER-investing
borrowing from bank, repaying loans - ANSWER-financing
is company generating enough cash to make payments on loans
does the company have enough assets to cover its liabilities - ANSWER-creditors
interested in assessing
ensure companies produce financial information that is useful in making decisions -
ANSWER-generally accepted accounting principles(GAAP) and IFRS
relevant and faithful representation
comparable, verifiable, timely, understandable - ANSWER-info must be two things
four things
