Accounting 201 Exam 1 Questions With Accurate
Solutions
Sole Proprietorship - CORRECT ANSWERbusiness owned by one person
simple to establish
owner controlled
tax advantages
owner personally liable
financially difficult
Accounting 201 Exam 1 Questions With Accurate
Solutions
Sole Proprietorship - CORRECT ANSWER✅✅✅business owned by one person
simple to establish
owner controlled
tax advantages
owner personally liable
financially difficult
Partnership - CORRECT ANSWER✅✅✅2 or more owners
simple to establish
shared control
broader skills and resources
tax advantages
personally liable
Corporation - CORRECT ANSWER✅✅✅separate legal entity owned by stockholders
easy to transfer ownership
greater capital raising potential
unfavorable tax treatment
lower legal liabilities for owners
Internal Users of Financial Info - CORRECT ANSWER✅✅✅Managers
-Finance borrow $ or issue stock?
-Marketing advertising costs
-HR hire or lay off ppl?
-Management expand busi? sell off parts?
, External Users of Financial Info - CORRECT ANSWER✅✅✅-Investors who should I
invest in?
-Creditors should I loan them $?
-Others regulatory agencies, tax authorities, customers, labor
Types of Business Activities - Financing - CORRECT ANSWER✅✅✅get large sums of $
from 2 sources:
1. Creditors- borrowing creates liabilities(things the company owes)
2. Owners- selling/issuing stock to shareholders(shareholders equity-how much of a company a
stockholder owns)
Types of Business Activities - Investing - CORRECT ANSWER✅✅✅obtaining resources or
assets(things that have value to the company) to operate a business
e.g. buying and selling land, buildings, equipment, vehicles
Types of Business Activities - Operating - CORRECT ANSWER✅✅✅primary activities of
business - normal activities the company performs to run their business
e.g. selling goods, providing services, paying employees, advertising, paying utilities
1. Revenues - increase assets resulting from the sale of g&s
2. Expense - cost of assets consumed or services used to generate revenue
Accounting - CORRECT ANSWER✅✅✅info system that identifies, records, and
communicates the economic events of an organization to interested users.
uses 4 financial statements
Income Statement - CORRECT ANSWER✅✅✅reports operating success or failure for a
period of time
summarizes revenues and expenses
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller STANGRADES. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.99. You're not tied to anything after your purchase.
