ACG 2021 Ch 1 Quiz Latest Update with
Complete Solutions
What is a notable tax advantage of a sole proprietorship compared to a corporation? ✔✔
Generally, it receives more favorable tax treatment than a corporation.
Which business structure has owners known as stockholders? ✔✔ Only corporations.
In which section of the cash flow statement would you find the cash collected from customers
during the latest accounting period? ✔✔ The operating section.
What best defines stockholders' equity? ✔✔ It represents the owners' claims on the company.
How would you best describe accounting information? ✔✔ An information system that
identifies, records, and communicates the economic events of an organization to interested users.
How should a company report the issuance of common stock on its cash flow statement? ✔✔ As
a financing activity.
1
, If Chris's Maid Service started the year with assets worth $100,000 and stockholders' equity of
$40,000, earned $110,000 in net income, paid $5,000 in dividends, and ended the year with total
assets of $240,000, what would be the total liabilities at year-end? ✔✔ $95,000.
At year-end, Stoneland Corporation has assets of $6,500 and liabilities of $2,000. What is the
company's equity at the end of the year? ✔✔ $4,500.
If total liabilities decreased by $10,000 and total assets decreased by $5,000 over a period, how
must total stockholders' equity have changed during the same period? ✔✔ It must have increased
by $5,000.
When does a company achieve net income? ✔✔ When its revenues exceed its expenses.
Which of the following is not considered one of the three main business activities listed on the
statement of cash flows? ✔✔ Advertising activities.
Who among the following is not an external user of accounting data? ✔✔ Chief financial officer.
2
Complete Solutions
What is a notable tax advantage of a sole proprietorship compared to a corporation? ✔✔
Generally, it receives more favorable tax treatment than a corporation.
Which business structure has owners known as stockholders? ✔✔ Only corporations.
In which section of the cash flow statement would you find the cash collected from customers
during the latest accounting period? ✔✔ The operating section.
What best defines stockholders' equity? ✔✔ It represents the owners' claims on the company.
How would you best describe accounting information? ✔✔ An information system that
identifies, records, and communicates the economic events of an organization to interested users.
How should a company report the issuance of common stock on its cash flow statement? ✔✔ As
a financing activity.
1
, If Chris's Maid Service started the year with assets worth $100,000 and stockholders' equity of
$40,000, earned $110,000 in net income, paid $5,000 in dividends, and ended the year with total
assets of $240,000, what would be the total liabilities at year-end? ✔✔ $95,000.
At year-end, Stoneland Corporation has assets of $6,500 and liabilities of $2,000. What is the
company's equity at the end of the year? ✔✔ $4,500.
If total liabilities decreased by $10,000 and total assets decreased by $5,000 over a period, how
must total stockholders' equity have changed during the same period? ✔✔ It must have increased
by $5,000.
When does a company achieve net income? ✔✔ When its revenues exceed its expenses.
Which of the following is not considered one of the three main business activities listed on the
statement of cash flows? ✔✔ Advertising activities.
Who among the following is not an external user of accounting data? ✔✔ Chief financial officer.
2
