Accountants refer to an economic event as a

• purchase.

• sale.

• transaction.

• change in ownership.

The accounting process involves all of the following except

• identifying economic transactions that are relevant to the business.

• communicating financial information to users by preparing financial reports.

• recording nonquantifiable economic events.

• analyzing and interpreting financial reports.

The accounting process is correctly sequenced as

• identification, communication, recording.

• recording, communication, identification.

• identification, recording, communication.

• communication, recording, identification.

Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?

• Identification

• Communication

• Recording

• Analysis

The partnership form of business organization

• is a separate legal entity.

• is a common form of organization for service-type businesses.

• enjoys an unlimited life.

• enjoys a limited life.

Which of the following is not an advantage of the corporate form of business organization?

• Limited liability of stockholders

• Transferability of ownership

• Unlimited personal liability for stockholders

• Unlimited life

The common characteristic possessed by all assets is

• long life.

• great monetary value.

• tangible nature.

• future economic benefit.

Sources of increases to stockholders' equity are

• sales of stock.

• purchases of merchandise.

• dividends.

• expenses.

If total liabilities decreased by $15,000 and stockholders' equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?

• $20,000 increase

• $10,000 decrease

• $10,000 increase

• $15,000 decrease

On January 1, 2008, Jackson Company reported stockholders' equity of $470,000. During the year, the company paid dividends of $20,000. At December 31, 2008, the balance in stockholders' equity was $500,000. What amount of net income or net loss would the company report for 2008?

• Net income of $30,000

• Net loss of $50,000

• Net income of $10,000

• Net income of $50,000