Ch. 3 Accounting Cycle: Corporation

Which of the following is the first step in the accounting cycle?

• Record journal entries

• Analyze transactions

• Post ledger account entries

• Close accounts

Which of the following is a common adjustment made to a trial balance which distributes the cost of a long-term asset over its useful life?

• Merchandise inventory

• Service inventory

• Depreciation

• Equity

Which of the following terms describes earnings maintained by a company for financial growth?

• Retained earnings

• Net income

• Net expenses

• Gross earnings

• $1,370,000

• $1,970,000

• $3,170,000

• $3,770,000

Which of the following is a detective control?

• Segregation of duties

• Approval, authorization and verification

• Security of assets

• Audits

Which of the following terms describes a document which establishes a corporation?

• Partnership

• Government articles

• Shareholders’ document

• Articles of incorporation

Which of the following terms describes a business owned by one or more people which functions as its own legal entity?

• Partnership

• Corporation

• Proprietorship

• Board of directors

Which of the following terms describes a business owned by two or more individuals?

• Partnership

• Corporation

• Proprietorship

• Board of directors

Which of the following terms describes a business owned by one individual?

• Partnership

• Corporation

• Proprietorship

• Board of directors

Which of the following terms describes a business in which the profits and losses are reported on the personal tax returns of shareholders?

• A. S corporation

• B. C corporation

• C. S proprietorship

• D. C proprietorship