module 1

which entity could have double taxation

corporation

Limited liability applies to:

Casual investors in a corporation

Which of the following represents the profit equation?

Profit = Revenue - Expense

Which type of business may be owned by one individual?

both a sole proprietorship and a corporation

The owner of a dry cleaning business maintains separate checkbooks for his business and his personal affairs. This best describes an application of the:

business entity concept

Which of the following is an external stakeholder in a supermarket?

the company which supplies the baked goods for the bakery

accounting is...

the language of business

which entity has limited liability

corporation

There were only 30 tubs of ice cream to be sold, but the listing said 38. Which qualitative characteristic does this listing lack?

Faithful representation

Throughout history, business transactions have become more complex over time. As a result, accounting has:

evolved over time to meet user needs.

if information contains errors it is NOT

faithfully represented

All companies are required to follow GAAP.

false

Business Entity

financial information is recorded and reported separately from the owner's personal financial information

Historical Cost

measure and record the event based on the cost at the cash at the time of the event. Record it and do not go back and change even if the value changes in the future

Monetary Unit

money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis. Not cow, sheep, or gold. Recording all accounting events in DOLLARS

Which of the following is NOT an example of a for profit company?

red cross

Which type of entity can have one owner

sole proprietor and corporation

whcih entity is the easiest to form

sole proprietorship

Accounting can be defined as financial communication, or the language of business.

true