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2_takehome_bus form and role role_of_acctg_fall10_soln

2_takehome_bus form and role role_of_acctg_fall10_soln -...

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Acc 200P Name: _ KEY ________________________ TAKE-HOME QUIZ “Forms of Business Ownership and the Role of Accounting in Business” Instructions: 5 points for initials. PART I: Answer : ___ $900,000 _________ (5 pts) Capital stock issued $200,000 Dividends paid (300,000) Net income ? = 900,000 Increase in SE 800,000 PART II: True/False: Indicate beside each statement whether the statement is true or false. ( 5 pts each ) a. ___ T _____ On the XYZ Company’s balance sheet, the cash account balance includes cash that belongs personally to the owners of the business. This is a violation of the economic entity assumption . b. ___ T _____ Unless there is evidence to the contrary, the going concern assumption says that users of financial statements can assume the business will continue in the foreseeable future. c. ___ F _____ Economic resources owned by a business are called liabilities. (Answer: called assets) d. ___ F _____ The borrowing of money and the issuance of shares of stock are both common types of operating activities . (Answer: they are financing activities) e. ___ T _____
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