ACCT 210 | Chapter 1 | Quiz

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

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