ACG 2025 EXAM 1 PATTERSON QUESTIONS & ANSWERS| GRADE A| 100% CORRECT (VERIFIED SOLUTIONS)  

ACG 2025 EXAM 1 PATTERSON
QUESTIONS & ANSWERS| GRADE A|
100% CORRECT (VERIFIED SOLUTIONS)

, 3 forms of business organizations - ANSWER1. Sole Proprietorship
2. Partnership
3. Corporation

Advantages of a sole proprietorship - ANSWER-Simple to establish
-Owner controlled
-Tax advantages

Advantages of a partnership - ANSWER-Simple to establish
-Shared controll
-Broader skills and resources
-Tax advantages

Advantages of a corporation - ANSWER-Can attract large amounts of capital
-Easy transfer of ownership
-Can attract professional management
-Stockholders have limited liability
-Survives the death of its owner(s)

Disadvantages of a corporation - ANSWER-More government regulations
-Stockholders don't know if management is making decisions in the stockholders best
interests
-Subject to double taxation

Accounting - ANSWERThe information system that identifies, records, and
communicates the economic events of an organization to interested users

What are the two groups of accounting users - ANSWER1. Internal users
2. External users

Examples of internal users - ANSWER-Marketing
-Management
-Finance
-Human resources

Examples of external users - ANSWER-Creditors
-Investors

Examples of financial scandals - ANSWER-Enron
-Worldcom
-AIG