FSU PATTERSON ACG 2025 CHAPTER 1 QUESTIONS AND ANSWERS 100% SOLVED

Forms of Business Organizations - ANSWER1. Sole Proprietorship 2. Partnership 3. Corporations Sole Proprietorship - ANSWERo Simple to set up o Complete control over organization o Tax Advantages o Personally liable for all debts/legal obligations Financial Accounting - ANSWERIs focused on the needs of external users; External users (creditors, investors, customers, regulatory agencies) Managerial Accounting - ANSWERis focused on the needs of internal users; Internal Users (marketing, management, finances, human resources) Corporations - ANSWERo Easier to transfer ownership o Business organized as a separate legal entity owned by stockholders o More attractive to invest in/buy stocks from b/c easy to sell shares o Easier to raise funds o Less favorable tax treatment o Not held personally liable for debts/legal obligations The Sarbanes-Oxley Act resulted in: - ANSWER1. Top management must now certify the accuracy of financial information. 2. Penalties for fraudulent activity was increased. 3. Independence of auditors was increased. 4. Increased oversight by the board of directors must occur, including the board's selection and supervision of the independent auditor. Accounting Information System keeps track of the results of each of these business activities. All businesses are involved in three types of activity — - ANSWER1. financing,