Accounting Test #1 – Flashcards
39 test answers
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Kept totally separate
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The financial affairs of a business and the financial affairs of the owners should be
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Publicly owned corporations
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The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as
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Corporations
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Owners are not personally responsible for the debts of the business if the form of business organization is
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A business
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An example of an economic entity is
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Corporations
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The form of a business organization that is not affected by the withdrawal or death of an owner and can continue forever is
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Sole proprietorship
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A form of business entity owned by one person is called a(n)
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Principles
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Generally accepted accounting _______ are financial accounting standards that are changed and refined in response to changes in the environment in which businesses operate
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Audited
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The financial statements submitted to the SEC by a corporation must be _______ by an outside accountant to ensure their fairness and adherence to generally accepted accounting principles
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Stocks
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Ownership in a corporation is evidenced by shares of
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Governmental accounting
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Accountants normally choose to practice in one of three areas: public accounting, managerial accounting, or
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Corporation
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The three major legal forms of business entity are the sole proprietorship, the partnership, and the
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Statements
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The results of the accounting process are summarized in periodic reports called
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Services
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Tax accounting is a service offered by public accounting firms that involves tax _____ and tax planning
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Debtors
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The people, companies, or government agencies to whom a firm owes money are called
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True
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In a sole proprietorship the owner is responsible for the debts of the business if the firm is unable to pay?
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True
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Public accounting firms provide three major types of services: auditing, taxing accounting, and management advisory services?
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False
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The owners of a partnership business are referred to as stockholders?
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True
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The financial statements and the auditor's report must be made available to stockholders of publicly owned corporations?
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False
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The separate entity assumption applies only to the corporate form of business?
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True
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An economic entity is an organization whose major purpose is to produce a profit for its owners?
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False
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Currently, generally accepted accounting principles are developed by the American Institute of Certified Public Accountants?
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True
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The Securities and Exchange Commission requires that publicly owned corporations submit financial statements to it each year?
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True
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Laws passed by Congress in 1933 and 1934 gave the SEC final say on matters of financial reporting by publicly owned corporations?
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True
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Private accounting is also referred to as managerial accounting?
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False
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A business is an example of a social entity?
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False
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Anyone can invest in a closely held corporation?
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True
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The death or withdrawal of one partner ends the partnership?
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False
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The SEC uses financial information to determine a company's tax base?
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Economic Entity
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Is a business a Social or Economic Entity?
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True
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Is the main purpose of an economic entity to make money?
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The FASB
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The General Accepted Accounting Principles are developed by
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False
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Does the SEC determine a businesses tax base?
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General Accountant Principles
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What is the FASB responsible for
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The SEC
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The Government Agency that has final authority over the financial reporting of publicly owned corporations is
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False
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A corporation whose stock can be bought and sold is known as a "closely held corporations?"
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