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YourQuizResults
Question1.Proprietorshipsandpartnershipsaretaxableentities.
Youanswered:False.Youarecorrect.Proprietorsandpartnerspaypersonaltaxontheirshare
oftheprofits.Corporationsareseparatelegalentities.
Question2.Internalusersofaccountinginformationincludeacompany'sshareholders.
Youanswered:False.Thisisthecorrectchoice.Shareholdersareexternalusersoffinancial
statements.
Question3.Interestexpensewouldbeclassifiedunderoperatingactivities.
Youanswered:True.Congratulations.Youarecorrect!Interestexpenseisanoperating
activity.
Question4.Thenotestothefinancialstatementsarenotrequired.
Youanswered:False.Youarecorrect.Notestothefinancialstatementsareanintegralpartof
thestatements.
Question5.Thecostprinciplerequiresthatassetsbereportedonthebalancesheetattheir
currentcost.
Youanswered:False.Thisiscorrect.Thecostprinciplerequiresthatassetsbereportedonthe
balancesheetattheirhistoricalcost.
Question6.Easytransferofownershipisacharacteristicofwhichformofbusiness
organization?
Youanswered:Corporation.Thisiscorrect!Becausesharescanbesold,itiseasiertotransfer
ownershipinacorporation.Seepage4ofthetextbook.
Question7.Inwhichformsofbusinessorganizationaretheownerspersonallyliableforall
thedebtsofthebusiness?
Youanswered:Proprietorshipandpartnership.Thisiscorrect!Proprietorsandpartnerspay
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personaltaxontheirshareoftheprofits.Corporationsareseparatelegalentities.Seepage4
ofthetext.
Question8.Internaluserswantanswerstoallofthefollowingquestionsexcept:
Youanswered:Howdoesthecompanycompareinsizewithitscompetitors?Thisiscorrect!
PleaserefertoIllustration12onpage6ofthetext.
Question9.Whichofthefollowingisnotanexternaluserofaccountingdata?
Youanswered:Financedirectors.Thisiscorrect!Financedirectorsareinternaldirectorsof
financialinformation.Seepage6ofthetext.
Question10.Payinginterestexpenseandreceivinginterestrevenueareexamplesof:
Youanswered:Operatingactivities.Thisiscorrect!Seepage9ofthetext.
Question11.Thepaymentofdividendsisanexampleofa(n):
Youanswered:Financingactivity.Thisiscorrect!Seepage8ofthetext.
Question12.Costofgoodssoldwouldbeclassifiedaswhattypeaccount?
Youanswered:Expense.Thisiscorrect!Costofgoodssoldorcostofsalesisclassifiedasan
expense.Seepage9ofthetext.
Question13.Whichofthefollowingwouldnotappearonthestatementofearnings?
Youanswered:Dividendspaid.Thisiscorrect!DividendspaidareshownontheStatementof
RetainedEarnings.Seepage12ofthetext.
Question14.WhichofthefollowingwouldnotappearonthestatementofRetained
Earnings?
Youanswered:Servicerevenue.Thisiscorrect!ServicerevenueappearsontheStatementof
Earnings.
Question15.Thefinancialstatementsareusuallypreparedinwhichofthefollowing
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sequences?
Youanswered:StatementofEarnings,StatementofRetainedEarnings,BalanceSheet,and
StatementofCashFlows.Thisiscorrect!Seepage21ofthetext.
Question16.Shareholders'equityattheendoftheyearwas:
Youanswered:$110,000.Thisiscorrect!Seepages18and19ofthetext.
Question17.Totalliabilitiesattheendoftheyearwere:
Youanswered:$105,000.Thisiscorrect!Totalliabilities=TotalAssetsShareholders'Equity.
Seepage13ofthetext.
Question18.Whentheauditorissatisfiedthatthefinancialstatementsarepresentedin
accordancewithgenerallyacceptedaccountingprinciples,thena(n):
Youanswered:Unqualifiedopinionisexpressed.Thisiscorrect!Seepage21ofthetext.
Question19.Whichoftheaccountingassumptionsrequiresthatonlythosethingsthatcanbe
expressedintermsofdollarsbeincludedintheaccountingrecords?
Youanswered:Monetaryunitassumption.Thisiscorrect!Themonetaryunitassumption
requiresthatonlythosethingsthatcanbeexpressedintermsofdollarsbeincludedinthe
accountingrecords.Seepage22inthetext.
Question20.Whichaccountingprinciplepreventscompaniesfromreportingtheirassetsat
theircurrentmarketvalue?
Youanswered:Costprinciple.Thisiscorrect.Thecostprinciplerequiresthatcompanies
reporttheirassetsathistoricalcost.
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