Introduction to Accounting - Part 1 (Review)

One of the advantages of a sole proprietorship is that the owner enjoys limited liability.

• True

• False

The partnership form of business organization is best suited for the practice of a profession.

• True

• False

Manufacturing involves purchasing and converting raw materials into finished goods.

• True

• False

A convenience store is an example of a service business.

• True

• False

The income of a sole proprietorship is taxed.

• True

• False

Accounting is described in many ways. Which of the following is not one of those descriptions?

• Accounting is for accountants only.

• Accounting is the "language of business".

• Accounting is an information system.

• Accounting is a practical science.

Who among the following are interested in determining the return of their investment in the business?

• Management

• Creditors

• Owners

• Employees

Which of the following information would be the concern of employees?

• The entity's compliance to rules and regulations.

• The status of the company's operations and whether it is hitting established targets.

• The stability and profitability of the reporting entity in order for them to decide on whether to withdraw or hold investment.

• The profitability and stability of an entity in order for them to assess the entity's ability to provide remuneration, retirement benefits and career opportunities.

Who among the following are considered internal users of accounting information?

• Regulatory Agencies

• Customers

• Creditors

• Management

This pertains to the mechanical task involving the collection of basic financial data

• Accounting

• Auditing

• Taxation

• Bookkeeping