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Owners in a sole proprietorship or a partnership can be held personally liable for debts the company has incurred, over and beyond the investment they have made.

• True
• False

Which of the following statements regarding the corporate form of business is correct?

• The disadvantages are that generating capital is difficult and that owners have limited liability.

• Disadvantages are that the business is subject to government regulations and double taxation on its income.

• One disadvantage is that ownership is easy to transfer.

• All of the other answer choices are correct.

When customers pay for services with a debit card, the company should debit Cash and credit Service Revenue.

• True
• False

Payment of dividends to stockholders is considered a(n):

• Operating Cash Flow

• Financing Cash Flow

• Investing Cash Flow

• Not A Cash Flow

Using the first-in, first-out method (FIFO), the first units purchased are assumed to be the first ones sold.

• True
• False

A debit beginning balance in the Allowance for Uncollectible Accounts before adjustment indicates that we’ve written off more bad debts in the current year than we had estimated.

• True
• False

Notes receivable typically arise from sales to customers.

• True
• False

Inventory is usually reported as a long-term asset in the balance sheet.

• True
• False

For inventory that is shipped FOB destination, title transfers from the seller to the buyer once the seller ships the inventory.

• True
• False

Gross profit equals net revenues minus cost of goods sold.

• True
• False