Acct test 1

1. An advantage of the corporate form of business is that

• 1. it has limited life.

• 1. its owner’s personal resources are at stake.

• 1. it is simple to establish.

• its ownership is easily transferrable via the sale of shares of stock

1. Which of the following has the advantage of enabling a business to raise funds most easily?

• 1. Entity

• 1. Sole proprietorship

• 1. Corporation

• 1. Partnership

1. The right to receive money in the future is called a(n)

• 1. account payable.

• 1. account receivable.

• 1. liability.

• 1. revenue.

1. Resources owned by a business are referred to as

• 1. stockholders’ equity.

• 1. liabilities.

• 1. assets.

• 1. revenues.

1. Debts and obligations of a business are referred to as

• 1. assets.

• 1. equities.

• 1. liabilities.

• 1. expenses.

6. Which of the following is an asset?

• 1. Mortgage payable

• 1. Investments

• 1. Common stock

• 1. Retained earnings

7. Liabilities

• are future economic benefits.

• are debts and obligations.

• possess service potential.

• are things of value owned by a business.

1. Payments to stockholders are called

• expenses.

• liabilities.

• dividends.

• assets.

1. Net income will result during a time period when

• assets exceed liabilities.

• assets exceed revenues.

• expenses exceed revenues.

• revenues exceed expenses.

1. Which of the following financial statements is concerned with the company at a point in time?

• Balance sheet

• Income statement

• Retained earnings statement

• Statement of cash flows