FINANCIAL ACCOUNTING &
REPORTING (PRELIM) Exam Questions
with 100 Correct Answers
BUSINESS - legally-recognized organizational entity existing within an
economically free country.
BUSINESS - Designed to sell goods and/or provide services to
consumers, usually to generate profit.
INPUT, PROCE...
Two Types/Classification of Business - ✔✔Profit Business, Non-Profit
Business
Forms of Business Organizations - ✔✔Service Business, Merchandising
(Trading) Business, Corporation, Manufacturing Business
Legal Ownership - ✔✔Business Ownership
Service Business - ✔✔Offers services instead of selling products (e.g.,
salons, law firms).
Three Types of Business Ownership - ✔✔Sole
Proprietorship,Partnership,Corporation
Merchandising (Trading) Business - ✔✔Buys goods from suppliers and
sells them at a higher price. (e.g., supermarkets, clothing shops).
Sole Proprietorship - ✔✔One person owns and runs the business.
They receive all the profits but are also responsible for any debts.
Partnership - ✔✔Two or more people share ownership and profits, and are
responsible for debts.
It's based on a contract (written or oral).
An association of persons who contribute money, property, or industry.
Partnership Purpose - ✔✔To divide profits among themselves.
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