ACC212 Exam 1 Review

Retailers and wholesalers are two types of merchandisers.

• True

• False

A business must ensure that its enterprise fits into a single classification as a manufacturer, service provider, merchandiser, or lessor.

• True

• False

A business is required to pay dividends to stockholders at least two times per year.

• True

• False

A restaurant purchased a new oven for $45,000 by signing a five-year note payable to the seller. This transaction involves both investing and financing activities.

• True

• False

Unlimited personal liability for business debts is the primary disadvantage of a sole proprietorship.

• True

• False

Unlimited personal liability for business debts is a possible disadvantage of a partnership.

• True

• False

A limited liability company (LLC) may allow owners to enjoy the limited liability of a corporation while benefiting from tax advantages that are similar to a sole proprietorship or partnership.

• True

• False

Unlimited personal liability for corporate obligations is a major disadvantage of the corporate choice of entity.

• True

• False

Financial and managerial are two broad categories of accounting.

• True

• False

Financial statement audits do not provide any level of assurance regarding the accuracy of a company's financial statements.

• True

• False