Acct 101

Which is not one of the three primary business activities? Financing. Operating. Advertising. Investing.

Advertising

Which is not one of the three forms of business organization? Sole proprietorship. Creditorship. Partnership. Corporation.

Creditorship

Which of the following is an example of a financing activity? Issuing shares of common stock. Selling goods on account. Buying delivery equipment. Buying inventory.

Issuing shares of common stock

Which is an advantage of corporations relative to partnerships and sole proprietorships? Lower taxes. Harder to transfer ownership. Reduced legal liability for investors. Most common form of organization.

Reduced legal liability for investors: an advantage of corporations is that investors are not personally liable for debts of the business. The other choices are incorrect because A) lower taxes, B) harder to transfer ownershop, and d) most common form of organizations are not true of corporations

Which statement about users of accounting information is incorrect? A. Management is considered an internal user. B. Taxing authorities are considered external users. C. Present creditors are considered external users. D. Regulatory authorities are considered internal users.

Regulatory authorities are considered internal users.

Which of the following did not result from the Sarbanes-Oxley Act? Top management must now certify the accuracy of financial information. Penalties for fraudulent activity increased. Independence of auditors increased. Tax rates on corporations increased.

Tax rates in corporations increased, because the SOX Act was created to reduce unethical corporate behavior and decrease the likelihood of future corporate scandals, not to address tax rates.