Self Study 1-4 - 1. Which is not one of the three forms of...

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1. Which is not one of the three forms of business organization? A. Sole proprietorsh B. Creditorship. C. Partnership. D. Corporation. Correct!
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2. Which is an advantage of corporations relative to partnerships and sole proprietorships? A. B. Harder to transfer ownership. C. Reduced legal liability for investors. D. Most common form of organization. Ownership is easier to transfer in a corporation than in a partnership or proprietorship.
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3. Which statement about users of accounting information is incorrect ? A. B. Taxing authorities are considered external C. Present creditors are considered external u D. Regulatory authorities are considered inte Businesses or individuals to whom a firm owes money are considered external users of account information. 4. Which of the following did not result from the Sarbanes-Oxley Act? A. B. Penalties for fraudulent activity increased. C. Independence of auditors increased. D. Tax rates on corporations increased. Correct!
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5. Which is not one of the three primary business activities? A. B. Operating. C. Advertising. D. Investing. Correct! 6. Which of the following is an example of a financing activity? A. B. Selling goods on account. C. Buying delivery equipment. D. Buying inventory. This is an operating activity.
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7. Net income will result during a time period when: A. B. assets exceed revenues. C. expenses exceed revenues. D. revenues exceed expenses. Correct!
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8. The financial statements for Harold Corporation contained the following information. What was Harold's net income? A. B. $15,000. C. $65,000. D. $45,000. Correct!
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9. What section of a cash flow statement indicates the cash spent on new equipment during the past accounting period? A. B. The operating section. C. The financing section. D. The cash flow statement does not give this Correct! 10. Which statement presents information as of a specific point in time? A. B. Balance sheet. C. Statement of cash flows. D. Retained earnings statement. This statement covers a period of time.
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11. Which financial statement reports assets, liabilities, and stockholders' equity? A. B. Retained earnings statement. C. Balance sheet. D. Statement of cash flows. Correct! 12. Stockholders' equity represents: A. B. claims of employees. C. The difference between revenues and expe D. claims of owners. Correct!
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13. As of December 31, 2007, Stoneland Corporation has assets of $3,500 and stockholders' equity of $2,000. What are the liabilities for Stoneland Corporation as of December 31, 2007? A. B. $1,000. C. $2,500. D. $2,000. Correct!
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The segment of a corporation's annual report that describes the corporation's accounting methods is the: A. B. management discussion and analysis. C. auditor's report. D.
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Self Study 1-4 - 1. Which is not one of the three forms of...

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