ACCT ch.1

Generally Accepted Accounting Principles (GAAP) are currently formulated by the

Financial Accounting Standards Board (FASB)

The balance sheet reports

Financial position on specific date

Which type of business organization is owned by only one owner?

Sole proprietorship

Which of the following characteristics best describes a corporation?

Stockholders not personally liable for entity's debts

At the end of a recent year, Global Cleaning Service, a full-service house and office cleaning service, had total assets of $3,630 and equity of $2,280. How much were Global Cleaning Service's liabilities?

$1,350

Assume Global Cleaning Service had net income of $570 for the year. Global Cleaning Service's beginning and ending total assets were $4,520 and $4,180, respectively. Calculate Global Cleaning Service's return on assets(ROA) for the year.

13.1%

Which of the following is not an external user of a business's financial information?

Customers

Which of the following requires accounting information to be complete, neutral, and free from material error?

Faithful representation concept

Assume that Global Cleaning Service performed cleaning services for a department store on account for $180. How would this transaction affect Global Cleaning Service's accounting equation?

Increase both assets and equity by $180

Accounting is the information system that

Measures business activities, communicates the results to decision makers, processes information into reports. All of the above

Consider the overall effects on Global Cleaning Service from selling and performing services on account for $6,400 and paying expenses totaling $2,500. What is Global Cleaning Service's net income or net loss?

Net income of $3,900