Sheet - 1Which of the following is an advantage of corporations relative to partnerships and sole proprietorships Reduced legal liability for

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1Which of the following is an advantage of corporations relative to partnerships and sole proprietorships? Reduced legal liability for investors2 Which of the following groups uses accounting information to determine whether the company can pay its obligations? Creditors .3 Which type of corporate information is readily available to investors? amount of net income retained in the business 4Ending retained earnings for a period is equal to Beginning retained earnings + Net income – Dividends 5 Which of the following financial statements is concerned with the company at a point in time? Balance sheet . 6 The primary purpose of the statement of cash flows is to report information about cash receipts and cash payments of a company7 Dividends appear on the retained earnings statement only9 Accounting information should be verifiable in order to enhance reliability.10 Which accounting assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitments? Going concern assumption 11 Howard Company had a transaction that caused a $5,000 increase in both assets and total liabilities. This transaction could have been a(n): Purchase of office equipment for $12,000, paying $7,000 cash and issuing a note payable for the balance.12 A T account is a way of depicting the basic form of an account.13 In recording an accounting transaction in a double-entry system the amount of the debits must equal the amount of the credits 14 adjustment is not necessary if statement is prepared to reflect lifetime operation16 why do generally accepted accounting principles require the application of the revenue recognition principle ? Failure to apply the revenue recognitipn principle could lead to an overstatement of revenue. 17which is right? The use of the cash basis of accounting violates both the revenue recognition and matching principles.18 which is not a justification for adjusting entries ? Adjusting entries are necessary to bring the general ledger accounts in line with the budget.19 Detailed records of goods held for resale are not maintained under a periodic inventory system20 Under a perpetual inventory system, acquisition of merchandise for resale is debited to the: Merchandise Inventory account.21 Which of the following statements is true regarding the profit margin ratio ? A The profit margin ratio can be improved by increasing the gross profit rate and/or controlling operating expenses and other costsB The profit margin ratio vary across industries C discount stores with high merchandise turnover generally have lower profit margins.DIf the profit margin ratio has a higher value, this suggests favorable return on each dollar of sales.22 Goods held on consignment are never owned by the consignee23 Which of the following items will increase inventoriable costs
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This note was uploaded on 02/19/2011 for the course BUS 201 taught by Professor Tomos during the Spring '11 term at Indian Institute Of Management, Ahmedabad.

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Sheet - 1Which of the following is an advantage of corporations relative to partnerships and sole proprietorships Reduced legal liability for

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