ACCT 2010 UNT FINAL REVIEW QUESTIONS AND COMPLETE SOLUTIONS

Suppose you are starting a medical data analytics firm. Which form of business will limit your liability for the business to the amount you have invested? Corporation The primary objective of financial reporting is to provide information useful for making investment and credit decisions. Which type of business organization provides the least amount of protection for bankers and other creditors of the company? Corporation Crumb Enterprises buys a warehouse for$550,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal shows a value of $620,000 for the warehouse. The seller had originally purchased the building for $510,000. Crumb has a similar warehouse on the West Coast that has a book value of$561,000. Under the historical cost principle, Crumb should record the building for $550,000 ( INITIAL PURCHASE PRICE) Which of the following is a true statement about International Financial Reporting Standards? They are converging gradually with U.S. standards. Revenues are increases in retained earnings resulting from selling products or performing services. The accounting equation can be expressed as Assets−Liabilities = Owners' equity. OR A=L+E The nature of an asset is best described as an economic resource that's expected to benefit future operations. How would net income be most likely to affect the accounting equation? Increase assets and increase stockholders' equity During the year, FastDry Corporation has 300,000 in revenues, $155,000 in expenses, and $9,000 in dividend declarations and payments. Stockholders' equity changed by +$136,000 =REVENUE-EXPENSE-DIVIDENDS