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TAMU ACCT 229 - Exam 1 Practice Questions and Answers (100% Pass)
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TAMU ACCT 229 - Exam 1 Practice Questions and Answers (100% Pass)
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©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Monday, July 29, 2024 12:15 PMTAMU ACCT 229 - Exam 1 Practice
Questions and Answers (100% Pass)
3 types of businesses - ✔️✔️sole proprietorship, partnership, corporation
unlimited liability - ✔️✔️sole proprietorship & partnership
limited liability - ✔️✔️corporation
Sole Proprietorship - ✔️✔️one owner
advantage: easy to form
separate entity for accounting purposes
not a separate entity for legal purposes or tax purposes
Partnership - ✔️✔️two or more owners
separate entity for accounting purposes
not a separate entity for legal or tax purposes
Corporations - ✔️✔️business incorporated under the laws of a particular state.
Advantages: limited liability, continuity of life, ease in transfer of stock (ownership),
opportunity to raise large amounts of money by selling shares of stock to a large
number of people.
3 types of business activities - ✔️✔️financing, investing, operating
Operating Activities - ✔️✔️everyday activities
-sell inventory, pay employees
Investing Activities - ✔️✔️how you grow your company
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, ©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Monday, July 29, 2024 12:15 PM
-buying building, equipment, vehicles, fixtures
Financing Activities - ✔️✔️how you pay for your growth
-borrow money: temporary financing
-issue stock: permanent
4 financial statements - ✔️✔️Income statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
What does a balance sheet show? - ✔️✔️Shows the financial position of a company at a
point in time. A = L + SHE
Assests - ✔️✔️what a company owns, or what is owed to a company
Laiabilities - ✔️✔️what the company owes
Stockholders Equity - ✔️✔️ownership. (common stock & retained earnings)
Monetary Unity Assumption - ✔️✔️Only transactions that can be expressed in terms of
money can be included in the accounting records
Economic Entity Assumption - ✔️✔️Activities of the business are separate from activities
of the owners
Time Period Assumption - ✔️✔️The long life of a company can be reported over a series
of shorter time periods. Makes it possible to prepare the Income Statements for a
specific time period.
Going Concern Assumption - ✔️✔️The company will not go out of business in the near
future. Not liquidating.
Historical Cost Principle - ✔️✔️record assets at the cost paid to acquire them
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