Accounting Chpt2 q10

Indicate whether the statement is true or false. Only businesses that earn a profit will have the economic resources to continue to operate.

• True

• False

Is it true that owning your own business allows you to keep all the profits generated?

• True

• False

Indicate whether the statement is true or false. For accounting purposes, a business is an entity separate from its owners.

• True

• False

Indicate whether the statement is true or false. Basic accounting rules and procedures differ from business to business.

• True

• False

Indicate whether the statement is true or false. A partnership can be owned by more than two individuals.

• True

• False

GAAP stands for General Accounting and Audit Practices

• True

• False

Identify the choice that best completes the statement or answers the question. The amount of money earned after the costs of operating a business are paid is ____.

• revenue

• profit

• expense

• capital

Identify the choice that best completes the statement or answers the question. To survive, a business must ____.

• make a product consumers want and report profits to the IRS

• earn a profit and invest excess profits

• earn a profit and have someone willing to take the risk to run it

An entrepreneur ____.

• overseeing the day-to-day operations of the business

• takes an idea and turns it into a business.

• provides the necessary funding for the business

• handles the marketing strategies of the business

An example of an accounting assumption is ____.

• all businesses prepare reports for governmental review

• business transactions are regularly adjusted for inflation

• a business has the ability to operate indefinitely

• all businesses must pay taxes to the government in a timely fashion