VYC1 Test

1.True

1.In a sole proprietorship the owner is responsible for the debts of the business if the firm is unable to pay?

1.False

1.The owners of a partnership business are referred to as stockholders?

2.True

2.Public accounting firms provide three major types of services: auditing, taxing accounting, and management advisory services?

2.False

2.The separate entity assumption applies only to the corporate form of business?

3.False

3.Currently, generally accepted accounting principles are developed by the American Institute of Certified Public Accountants?

3.True

3.The financial statements and the auditor's report must be made available to stockholders of publicly owned corporations?

4.False

4.A business is an example of a social entity?

4.True

4.An economic entity is an organization whose major purpose is to produce a profit for its owners?

5.False

5.Anyone can invest in a closely held corporation?

5.True

5.The Securities and Exchange Commission requires that publicly owned corporations submit financial statements to it each year?

6.True

6.Laws passed by Congress in 1933 and 1934 gave the SEC final say on matters of financial reporting by publicly owned corporations?

6.False

6.The SEC uses financial information to determine a company's tax base?

7.False

7.Does the SEC determine a businesses tax base?

7.True

7.Private accounting is also referred to as managerial accounting?

8.False

8.A corporation whose stock can be bought and sold is known as a "closely held corporations?"

8.True

8.The death or withdrawal of one partner ends the partnership?

9.True

9.Is the main purpose of an economic entity to make money?

Sole proprietorship

A form of business entity owned by one person is called a(n)

Governmental accounting

Accountants normally choose to practice in one of three areas: public accounting, managerial accounting, or

An independent certified public accountant

All financial statements submitted to the SEC by publicly owned corporations must include an auditor's report prepared by

A business

An example of an economic entity is

Principles

Generally accepted accounting _______ are financial accounting standards that are changed and refined in response to changes in the environment in which businesses operate

Economic Entity

Is a business a Social or Economic Entity?

Corporations

Owners are not personally responsible for the debts of the business if the form of business organization is

Stocks

Ownership in a corporation is evidenced by shares of

Services

Tax accounting is a service offered by public accounting firms that involves tax _____ and tax planning

Developing generally accepted accounting principles

The Financial Accounting Standards Board is responsible for

The FASB

The General Accepted Accounting Principles are developed by

The SEC

The Government Agency that has final authority over the financial reporting of publicly owned corporations is

Managerial Accounting

The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as

Publicly owned corporations

The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as

Kept totally separate

The financial affairs of a business and the financial affairs of the owners should be

Audited

The financial statements submitted to the SEC by a corporation must be _______ by an outside accountant to ensure their fairness and adherence to generally accepted accounting principles

Corporations

The form of a business organization that is not affected by the withdrawal or death of an owner and can continue forever is

The SEC

The government agency that has final authority over the financial reporting of publicly owned corporations is

Debtors

The people, companies, or government agencies to whom a firm owes money are called

Statements

The results of the accounting process are summarized in periodic reports called

Corporation

The three major legal forms of business entity are the sole proprietorship, the partnership, and the