ACG 2021 FSU Exam 1 (2025) Actual Exam
Questions and Answers A+ Graded
Forms .of .Business .Organization .- .CORRECT .ANSWER-Sole .Proprietorship,
.Partnership .and .Corporation
Sole .Proprietorship .- .CORRECT .ANSWER-Simple .to .establish, .Owner .controlled
.and .Tax .advantages
Partnership .- .CORRECT .ANSWER-Simple .to .establish, .Shared .control, .Broader
.skills .and .resources .and .Tax .advantages
Corporation .- .CORRECT .ANSWER-Easier .to .transfer .ownership, .Easier .to
.increase .funds, .No .personal .liability
What .is .a .corporation? .- .CORRECT .ANSWER-An .incorporated .business .entity
.that .has .filed .articles .of .incorporation .in .a .state .of .domicile
What .are .the .advantages .of .a .corporation? .- .CORRECT .ANSWER-They .can
.attract .large .amounts .of .capital .investment
Allows .for .an .easy .transfer .of .ownership
Can .attract .professional .management
Provides .stockholders .with .limited .liability
Survives .the .death .of .its .owner(s)
What .are .the .disadvantages .of .a .corporation? .- .CORRECT .ANSWER-
Corporations .are .subjected .to .more .government .regulation
Shareholders .can .have .difficulty .knowing .whether .management .is .making
.decisions .in .shareholder's .best .interest
Corporations .are .subjected .to .income .taxation .(double .taxation)
Accounting .- .CORRECT .ANSWER-The .info .system .that .identifies, .record .and
.communicates .the .economic .events .of .an .organization .to .interested .users
What .is .the .two .groups .for .accounting? .- .CORRECT .ANSWER-Internal .Users
.and .External .Users
Internal .Users .- .CORRECT .ANSWER-Work .inside .of .a .business .that's .being
.examined
Ex) .Marketing, .Management, .Finance .and .Human .Resources
, External .Users .- .CORRECT .ANSWER-People .who .are .not .employees .of .the
.business
Ex) .Investors .(Shareholders) .and .Creditors .(Bankers)
What .is .the .purpose .of .accounting? .- .CORRECT .ANSWER-To .provide .economic
.information .as .inputs .for .decision .making .by .used .of .the .info
Sarbanes-Oxly .Act .of .2002 .resulted .in .- .CORRECT .ANSWER-Top .management
.must .now .certify .the .accuracy .of .financial .info
Penalties .for .fraudulent .activity .was .increased
Independence .of .auditors .was .increased
Increased .oversight .by .the .board .of .directors .must .occur, .including .the .board's
.selection .and .supervision .of .the .independent .auditor
All .Businesses .are .involved .in .- .CORRECT .ANSWER-Financing, .Investing .and
.Operating
Financing .Activities .- .CORRECT .ANSWER-Borrowing .money .(debt .financing)
.and .Issuing .(selling) .shares .of .stock .for .cash
Notes .payable .are .due ._______ .and .bonds .payable .are .due .______ .- .CORRECT
.ANSWER-Sooner; .Later
Investing .Activities .- .CORRECT .ANSWER-Purchase .of .resources .a .company
.needs .to .operate
Items .that .are .commonly .affected .in .Operating .Activities .- .CORRECT .ANSWER-
Revenues, .Inventory, .Receivables, .Expenses, .Liabilities, .Net .income .and .Net
.loss
Revenues .- .CORRECT .ANSWER-Amounts .earned .from .the .sales .of .products
Inventory .- .CORRECT .ANSWER-Goods .available .for .sale .to .customers
Receivables .- .CORRECT .ANSWER-Right .to .receive .money .from .another .party
Expenses .- .CORRECT .ANSWER-Cost .of .assets .consumed .or .services .used
Liabilities .- .CORRECT .ANSWER-Arising .from .expenses .and .represent .amount
.owed .to .another .party
Net .income .- .CORRECT .ANSWER-The .excess .of .revenues .over .expenses
Net .loss .- .CORRECT .ANSWER-The .excess .of .expenses .over .revenues
What .are .the .financial .statements? .- .CORRECT .ANSWER-Income .Statement,
.Statement .of .Shareholders' .Equity, .Balance .Sheet .and .Statement .of .Cash
.Flows
Questions and Answers A+ Graded
Forms .of .Business .Organization .- .CORRECT .ANSWER-Sole .Proprietorship,
.Partnership .and .Corporation
Sole .Proprietorship .- .CORRECT .ANSWER-Simple .to .establish, .Owner .controlled
.and .Tax .advantages
Partnership .- .CORRECT .ANSWER-Simple .to .establish, .Shared .control, .Broader
.skills .and .resources .and .Tax .advantages
Corporation .- .CORRECT .ANSWER-Easier .to .transfer .ownership, .Easier .to
.increase .funds, .No .personal .liability
What .is .a .corporation? .- .CORRECT .ANSWER-An .incorporated .business .entity
.that .has .filed .articles .of .incorporation .in .a .state .of .domicile
What .are .the .advantages .of .a .corporation? .- .CORRECT .ANSWER-They .can
.attract .large .amounts .of .capital .investment
Allows .for .an .easy .transfer .of .ownership
Can .attract .professional .management
Provides .stockholders .with .limited .liability
Survives .the .death .of .its .owner(s)
What .are .the .disadvantages .of .a .corporation? .- .CORRECT .ANSWER-
Corporations .are .subjected .to .more .government .regulation
Shareholders .can .have .difficulty .knowing .whether .management .is .making
.decisions .in .shareholder's .best .interest
Corporations .are .subjected .to .income .taxation .(double .taxation)
Accounting .- .CORRECT .ANSWER-The .info .system .that .identifies, .record .and
.communicates .the .economic .events .of .an .organization .to .interested .users
What .is .the .two .groups .for .accounting? .- .CORRECT .ANSWER-Internal .Users
.and .External .Users
Internal .Users .- .CORRECT .ANSWER-Work .inside .of .a .business .that's .being
.examined
Ex) .Marketing, .Management, .Finance .and .Human .Resources
, External .Users .- .CORRECT .ANSWER-People .who .are .not .employees .of .the
.business
Ex) .Investors .(Shareholders) .and .Creditors .(Bankers)
What .is .the .purpose .of .accounting? .- .CORRECT .ANSWER-To .provide .economic
.information .as .inputs .for .decision .making .by .used .of .the .info
Sarbanes-Oxly .Act .of .2002 .resulted .in .- .CORRECT .ANSWER-Top .management
.must .now .certify .the .accuracy .of .financial .info
Penalties .for .fraudulent .activity .was .increased
Independence .of .auditors .was .increased
Increased .oversight .by .the .board .of .directors .must .occur, .including .the .board's
.selection .and .supervision .of .the .independent .auditor
All .Businesses .are .involved .in .- .CORRECT .ANSWER-Financing, .Investing .and
.Operating
Financing .Activities .- .CORRECT .ANSWER-Borrowing .money .(debt .financing)
.and .Issuing .(selling) .shares .of .stock .for .cash
Notes .payable .are .due ._______ .and .bonds .payable .are .due .______ .- .CORRECT
.ANSWER-Sooner; .Later
Investing .Activities .- .CORRECT .ANSWER-Purchase .of .resources .a .company
.needs .to .operate
Items .that .are .commonly .affected .in .Operating .Activities .- .CORRECT .ANSWER-
Revenues, .Inventory, .Receivables, .Expenses, .Liabilities, .Net .income .and .Net
.loss
Revenues .- .CORRECT .ANSWER-Amounts .earned .from .the .sales .of .products
Inventory .- .CORRECT .ANSWER-Goods .available .for .sale .to .customers
Receivables .- .CORRECT .ANSWER-Right .to .receive .money .from .another .party
Expenses .- .CORRECT .ANSWER-Cost .of .assets .consumed .or .services .used
Liabilities .- .CORRECT .ANSWER-Arising .from .expenses .and .represent .amount
.owed .to .another .party
Net .income .- .CORRECT .ANSWER-The .excess .of .revenues .over .expenses
Net .loss .- .CORRECT .ANSWER-The .excess .of .expenses .over .revenues
What .are .the .financial .statements? .- .CORRECT .ANSWER-Income .Statement,
.Statement .of .Shareholders' .Equity, .Balance .Sheet .and .Statement .of .Cash
.Flows