Survey of Accounting Chapter 1 Exam Questions and Answers Latest update 2024 Already Passed
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Survey of Accounting Chapter 1
Institution
Survey Of Accounting Chapter 1
Survey of Accounting Chapter 1 Exam Questions and Answers Latest update 2024 Already Passed
Service businesses - Answers provide services rather than products to customers.
ex. Delta Air Lines (transportation services)
The Walt Disney Company (entertainment services)
Merchandising businesses ...
Survey of Accounting Chapter 1 Exam Questions and Answers Latest update 2024 Already Passed
Service businesses - Answers provide services rather than products to customers.
ex. Delta Air Lines (transportation services)
The Walt Disney Company (entertainment services)
Merchandising businesses - Answers sell products they purchase from other businesses to customers.
ex. Walmart (general merchandise)
Amazon.com (books, music, videos)
Manufacturing businesses - Answers Change basic inputs into products that are sold to customers.
ex. General Motors Corporation (cars, trucks, vans)
Dell Inc. (personal computers)
To earn a profit, or to receive more value for the goods or services provided than the cost to make or
provide those goods and services. - Answers The objective of most businesses
-Proprietorship
-Partnership
-Corporation
-Limited Liability Company - Answers Forms of Business
Proprietorship - Answers Owned by one individual and is the easiest form of business to establish.
Makes up over 70% businesses in the United States.
Partnership - Answers Similar to a proprietorship, but it is owned by two or more individuals. Makes up
about 10% of businesses in the United States.
Corporation - Answers Operates as a legal entity separate from its owners, called stockholders. The
ownership is divided into shares of stock, which each stockholder purchases to gain ownership interest.
Makes up about 20% of businesses in the U.S.
Limited Liability Company - Answers Combine the ownership attributes of a partnership and
corporation. This format operates mainly like a partnership but owners have limited liability, which is an
advantage of the corporate structure.
Proprietorship - Answers What is the easiest business to form?
-unlimited liability
, -organizational life that could be limited by the life of the owner
-more difficult time raising captial - Answers What are the disadvantages of a proprietorship?
Corporation - Answers Separate legal entity, taxed separately from its owners.
Proprietorship - Answers Simple, No limitation, Nontaxable entity, limited access to capital
Partnership - Answers Simple, no limitation, nontaxable entity, average access to capital
Corporation - Answers Complex, Limited liability, taxable entity, extensive access to capital
Limited liability company - Answers Moderate, limited liability, nontaxable entity by election, Average
access to capital
By providing goods and services to customers so that they can make a profit - Answers How do
businesses make money?
-Low-cost strategy
-Premium- price strategy - Answers To maximize their profits, companies may use one of the following
two strategies:
Low-cost stategy - Answers here a company designs and produces products or services at a lower cost
than its competitors
Premium-price strategy - Answers here a company tries to design and produce products or services that
serve unique market needs, allowing it to charge premium prices.
Capital market stakeholders - Answers Providers of major financing for the business
ex. banks, owners, stockholders
Product or service market stakeholders - Answers Buyers of products or services and vendors to the
business
ex. customers and suppliers
Government stakeholders - Answers Collect taxes and fees from the business and its employees
ex. federal, state, and city governments
Internal stakeholders - Answers Individuals employed by the business
ex. employees and managers
Capital market - Answers capital market stakeholders provide financing for a company to start up,
expand, or continue business. Banks and creditors expect to recover the original amount loaned plus
interest. Stockholders want to maximize the value of their investment in a business.
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