Chapter 2 Accounting Test (true/false)

false

A corporation, unlike a partnership, would report assets and liabilities but not owner's equity.

true

A person is more likely to be happy in a career that is based on her or his traits, interests, and skills.

true

A person's values may change over time.

skills and experience

Does it appear that Miranda started her business to take advantage of her skills, her experience, or her education?

true

For accounting purposes, it is important to keep an owner's personal financial records separate from the business's financial records.

false

In a partnership, there are only 2 owners.

for profit

Is Miranda's Garden a for-profit or a not-for-profit organization.

Van only, business entity

Miranda purchased two vehicles: a van to use as a delivery truck and a used car for herself. Would these purchases be reported in the financial activities of Miranda's Garden? What accounting *assumption* should be followed in reporting the purchases?

false

Partnerships sometimes form for the purpose of selling additional stock for the public.

false

Service businesses are not-for-profit organization.

false

The IRS is rarely interested in the profit or loss earned by a business.

false

The amount of money earned after the costs of operating a business are paid is called capital.

false

The basic accounting procedures followed by a business vary depending on whether the business is a sole proprietorship, partnership, or corporation.

true

The sole prop. is the oldest and most common form of business organization.

true

Today, people rarely stay in one job or work for only one employer during their working lives.

sole prop., yes

What form of organization does Miranda's Garden currently have? Would that change if Miranda and Anna decide to become co-owners of a floral and gift shop?

merchandising and sole proprietorship

What type of business is Miranda's Garden?