ACreview - 1. A certain transaction affecting only two...

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1. A certain transaction affecting only two accounts causes a liability to increase by a certain amount. Which one of the following could be another effect of the same transaction? (Points: 1) an asset account is increased by the same amount. another liability account is increased by the same amount. an owner's equity account is increased by the same amount. 2. Which one of the following is a characteristic of the corporate organizational structure? (Points: 1) unlimited liability continuity of existence. inability to transfer of ownership taxability through the owner 3. Who has the primary responsibility for the company's financial statements? (Points: 1) internal auditors external auditors stockholders management. 4. Which one of the following is a claim against an entity's resources? (Points: 1) Accounts Receivable. Prepaid Rent. Accounts Payable. Retained Earnings. 5. Which one of the following is not part of a financial statement audit? (Points: 1) assessing the accounting principles underlying the financial statements expressing an opinion on the financial statements evaluating significant estimates made by the entity's management reviewing all of the entity's transactions for a period of time. 6. A purchase of inventory on open account results in an increase to which account? (Points: 1) Accounts Payable Notes Payable. Notes Receivable. Capital. 7. Which one of the following represents a residual interest? (Points: 1) assets
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liabilities owner's Equity 8. The organizational form having limited liability is the __________. (Points: 1) sole proprietorship partnership corporation 9. The balance sheet depicts the __________ of an entity. (Points: 1) financial position profitability cash flows viability 10. Which one of the following could be a disadvantage of the corporate organizational structure? Hint: Most characteristics of the corporate form stem from the fact that the entity is legally distinct from its owners. (Points: 1) Unlimited liability Continuity of existence Easy transfer of ownership Taxability as a separate entity 11. Which one of the following items found on a balance sheet is not a claim against an entity's resources? Hint: Remember what general classes of items constitute claims against resources. Also, consider what the term "resources" means. (Points: 1) Merchandise Inventory Notes Payable Accounts Payable Capital 12. Financial statements provide information about the performance of the company in the past. Why is this information relevant in business decision-making? (Points: 1)
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This note was uploaded on 06/05/2010 for the course FINA 6260 taught by Professor Fort during the Spring '10 term at University of Arkansas for Medical Sciences.

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ACreview - 1. A certain transaction affecting only two...

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