FINANCIAL ACCOUNTING (FINAL EDITION)-CH 1, 4,5,13, |2024-2025
ACTUAL COMPLETE EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS ) ALREADY GRADED A+.
Which of the following sets of characteristics describes a
corporation?
a.) simple to set up and maintains control with founder.
b.) easier to transfer ownership and raise funds, no personal liability.
c.) shared control, tax advantages, increased skills and resources.
d.) harder to raise funds and fives owner control. - ANSWER-b.) easier
to transfer ownership and raise funds, no personal liability.
All of the following are advantages for organizing a business as a sole
proprietorship EXCEPT
a.) a sole proprietorship is a simple form of business to set up.
b.) a sole proprietorship receives more favorable tax treatment.
c.) a sole proprietorship gives the owner control of the business.
d.) a sole proprietorship allows for an easy transfer of ownership
through stock sales. - ANSWER-d.) a sole proprietorship allows for an
easy transfer of ownership through stock sales.
The liability created by Old Navy when it purchases cleaning supplies
on credit from a supplier is termed a(n) a.) revenue
b.) account payable
c.) account receivable
d.) expense - ANSWER-b.) account payable
, When can an investor find information about operating activities in a
company's financial statements?
a.) on the statement of cash flows and the income statement.
b.) on the income statement only.
c.) on all four financial statements.
d.) on the statement of cash flows only. - ANSWER-a.) on the
statement of cash flows and the income statement.
A balence sheets shows
a.) assets, liabilities, and stockholders' equity.
b.) revenues, liabilities, and stockholders' equity.
c.) revenues, expenses, and dividends.
d.) expenses, dividends, and stockholders' equity. - ANSWER-a.)
assets, liabilities, and stockholders' equity.
Stockholders' equity
a.) is shown on the income statement.
b.) is usually equal to cash on hand.
c.) is equal to liabilities and retained earnings.
d.) includes retained earnings and common stock. - ANSWER-d.)
includes retained earnings and common stock.
Notes to the financial statements
a.) need not be read in detail if an unqualified opinion accompanies
the financial statements.
b.) are generally brief and few in number.
c.) help clarify information presented in the financial statements.
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