ACCT 210 | Chapter 1 | Quiz

question

A corporation is a business that is legally separate and distinct from its owners.
answer

True
question

An example of an external user of accounting information is the federal government.
answer

True
question

About 90% of the businesses in the United States are organized as corporations.
answer

False
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The role of accounting is to provide many different users with financial information to make economic decisions.
answer

True
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Proprietorship’s are owned by one owner and provide only services to their customers.
answer

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.
answer

Flase
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Accounting information users need reports about the economic activities and condition of businesses.
answer

True
question

Senior executives cannot be criminally prosecuted for the wrong doings they commit on behalf of the companies where they work.
answer

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.
answer

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.
answer

True
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The cost concept is the basis for entering the exchange price into the accounting records.
answer

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.
answer

False ?
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Generally accepted accounting principles regulate how and what financial information is reported by businesses.
answer

True
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The accounting equation can be expressed as Assets – Liabilities = Owner’s Equity.
answer

True
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Revenue is earned only when money is received.
answer

False
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A statement of owner’s equity reports the changes in the owner’s equity for a period of time.
answer

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.
answer

False
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The financial statements of a proprietorship should include the owner’s personal assets and liabilities.
answer

False
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The balance sheet represents the accounting equation.
answer

True
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The main objective for all business is to maximize unrealized profits.
answer

False

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