ACCT 210 | Chapter 1 | Quiz – Flashcards
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A corporation is a business that is legally separate and distinct from its owners.
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True
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An example of an external user of accounting information is the federal government.
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True
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About 90% of the businesses in the United States are organized as corporations.
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False
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The role of accounting is to provide many different users with financial information to make economic decisions.
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True
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Proprietorship's are owned by one owner and provide only services to their customers.
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False
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Only large companies such as Wal-Mart, JCP, General Motors, and the Bank of America can be organized as corporations.
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Flase
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Accounting information users need reports about the economic activities and condition of businesses.
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True
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Senior executives cannot be criminally prosecuted for the wrong doings they commit on behalf of the companies where they work.
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False
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The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities.
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False
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Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management.
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True
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The cost concept is the basis for entering the exchange price into the accounting records.
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True
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If a building is appraised for $85,000, offered for sale at $90,000, and the buyer pays $80,000 cash for it, the buyer would record the building at $85,000.
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False ?
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Generally accepted accounting principles regulate how and what financial information is reported by businesses.
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True
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The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.
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True
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Revenue is earned only when money is received.
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False
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A statement of owner's equity reports the changes in the owner's equity for a period of time.
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True
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The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.
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False
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The financial statements of a proprietorship should include the owner's personal assets and liabilities.
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False
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The balance sheet represents the accounting equation.
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True
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The main objective for all business is to maximize unrealized profits.
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False
