Accounting Principles 1 Final Exam (2024) || Questions & Answers (Graded A+)

Accounting Principles 1 Final Exam (2024) || Questions & Answers (Graded A+) The proprietorship form of business organization... - ANSWER - ...generally receives favorable tax treatment relative to a corporation A business organized as a corporation... - ANSWER - ...is owned by it stockholders The partnership form of business organization... - ANSWER - ...is a common form of organization for service-type businesses Most business enterprises in the United States are... - ANSWER - ...proprietorships and partnerships Not an advantage of the corporate form of business: - ANSWER - Favorable tax treatment Liabilities - ANSWER - debts and obligations of a business The statement of cash flows would disclose the payment of a dividend... - ANSWER - ...in the financing activities section What is an advantage corporations relative to partnerships and sole proprietorships? - ANSWER - Reduced legal liability for investors A small neighborhood barber shop that is operated by its owner would likely be organized as a: - ANSWER - proprietorship A local retail shop has been operating as a sole proprietorship. This business is growing and now the owner wants to incorporate. What is not a reason for this owner to incorporate? - ANSWER - The prestige of operating as a corporation Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During the time Jill is away from the business, Jack increases the debts of the business by $20,000. What is true regarding this debt? - ANSWER - Both Jack and Jill are personally liable for the business debt What question is most likely asked by an internal human resources director for the company? - ANSWER - What average pay raise is affordable for employees this year? Account receivable - ANSWER - the right to receive money in the future In a classified balance sheet, assets are usually classified as - ANSWER - current assets; long-term investments; property, plant, and equipment; and intangible assets When expenses exceed revenues, what is true? - ANSWER - A net loss results A current asset is... - ANSWER - expected to be converted to cash or used in the business within a relatively short period of time Trademarks would appear in which balance sheet section? - ANSWER - Intangible assets Ratios that measure the income or operating success of a company for a given period of time are... - ANSWER - ...profitability ratios