Accounting 2301 Exam 1 Questions
With Correct Answers
3 forms of business organization - CORRECT ANSWER✔✔-sole
| | | | | | | |
proprietorship, partnership, corporation | |
Sole proprietorship - CORRECT ANSWER✔✔-A business owned by one
| | | | | | | | |
person
advantages of sole proprietorship - CORRECT ANSWER✔✔--simple to
| | | | | | | |
establish
-owner control
| |
-tax advantages
|
Partnership - CORRECT ANSWER✔✔-business owned by two or more
| | | | | | | | |
persons associated as partners
| | |
advantages of a partnership - CORRECT ANSWER✔✔--simple to
| | | | | | | |
establish |
-shared control
| |
-broader skills and resources
| | | |
, -tax advantages |
Corporation - CORRECT ANSWER✔✔-A business organized as a separate
| | | | | | | |
legal entity owned by stockholders
| | | | |
Advantages of Corporations - CORRECT ANSWER✔✔--easier to transfer
| | | | | | | |
ownership
-easier to raise funds (it's easier for people to be stockholders by
| | | | | | | | | | | |
investing small amounts of money.)
| | | |
-no personal liability
| |
What are the main questions external parties, such as investors and
| | | | | | | | | | |
creditors, have about the business? - CORRECT ANSWER✔✔-Investors-
| | | | | | | |
Is the company earning a satisfactory income? How does one company
| | | | | | | | | | |
compare in size and profitability to another company?
| | | | | | |
Creditors- Will this company be able to pays its debts as they come due?
| | | | | | | | | | | | |
Common stock - CORRECT ANSWER✔✔-total amount paid in by
| | | | | | | | |
stockholders for the shares they purchase | | | | |
What are the claims investors and creditors have on a business? -
| | | | | | | | | | | |
CORRECT ANSWER✔✔-Investors in a corporation receive shares of stock
| | | | | | | |
to indicate their ownership claim
| | | | |
With Correct Answers
3 forms of business organization - CORRECT ANSWER✔✔-sole
| | | | | | | |
proprietorship, partnership, corporation | |
Sole proprietorship - CORRECT ANSWER✔✔-A business owned by one
| | | | | | | | |
person
advantages of sole proprietorship - CORRECT ANSWER✔✔--simple to
| | | | | | | |
establish
-owner control
| |
-tax advantages
|
Partnership - CORRECT ANSWER✔✔-business owned by two or more
| | | | | | | | |
persons associated as partners
| | |
advantages of a partnership - CORRECT ANSWER✔✔--simple to
| | | | | | | |
establish |
-shared control
| |
-broader skills and resources
| | | |
, -tax advantages |
Corporation - CORRECT ANSWER✔✔-A business organized as a separate
| | | | | | | |
legal entity owned by stockholders
| | | | |
Advantages of Corporations - CORRECT ANSWER✔✔--easier to transfer
| | | | | | | |
ownership
-easier to raise funds (it's easier for people to be stockholders by
| | | | | | | | | | | |
investing small amounts of money.)
| | | |
-no personal liability
| |
What are the main questions external parties, such as investors and
| | | | | | | | | | |
creditors, have about the business? - CORRECT ANSWER✔✔-Investors-
| | | | | | | |
Is the company earning a satisfactory income? How does one company
| | | | | | | | | | |
compare in size and profitability to another company?
| | | | | | |
Creditors- Will this company be able to pays its debts as they come due?
| | | | | | | | | | | | |
Common stock - CORRECT ANSWER✔✔-total amount paid in by
| | | | | | | | |
stockholders for the shares they purchase | | | | |
What are the claims investors and creditors have on a business? -
| | | | | | | | | | | |
CORRECT ANSWER✔✔-Investors in a corporation receive shares of stock
| | | | | | | |
to indicate their ownership claim
| | | | |
