Financial Accounting FINAL
A company's net sales revenue is $25,000,000. Its cost of goods sold is $15,000,000. Its beginning inventory is $100,000 and its ending inventory is $200,000. Which of the following is its rate of inventory turnover? A) 100 B) 75 C) 1.67 D) 0.01
A
A journal entry for a $75 payment for rent expense was posted as a debit to salary expense and a credit to cash. No other mistake was made. This error will cause which of the following conditions on the trial balance? A) The sum of the credits will still equal the sum of the debits. B) The sum of the debits will exceed the sum of the credits by $75. C) The sum of the debits will exceed the sum of the credits by $150. D) The sum of the credits will exceed the sum of the debits
A
An exclusive 20-year right to manufacture a product or to use a process is a: a. Patent. b. Copyright. c. Trademark. d. Franchise.
A
Average collection period? A. 365/ Receivables Turnover Ratio B. 365/ Inventory Turnover Ratio C. Beginning Inventory + Purchases - Ending Inventory D. COGS available/# of Units Available
A
Depreciation Rate? A. Asset Cost - Residual Value / expected use of the year B. Asset Cost x 2 / Service Life C. Asset Cost - Residual value / Service Life D. Depreciable cost/ total units expected to be produced
A
For the year, Sealy Incorporated reports net sales of $50,000, cost of goods sold of $40,000, and an average inventory balance of $5,000. What is Sealy's gross profit ratio? a. 20% b. 10% c. 25% d. 30%
A
Inventory Turnover Ratio? A. COGS/Average Inventory B. 365/ Inventory Turnover Ratio C. Gross Profit/ Net Sales D. COGS available/# of Units Available
A
On Oct. 1, Basher Company received $1,000 from a customer as advance payment for services to be rendered, and credited Unearned Revenues at the time of receipt. By Dec. 31, Basher had performed $750 of services. The adjusting journal entry at Dec.31 would include: A) A debit to unearned revenues for $750. B) A credit to unearned revenues for $750. C) A debit to unearned revenues for $250. D) A credit to unearned revenues for $250.
A
Operating cash flows would include which of the following? a. Payment for prepaid insurance. b. Receipt of cash from selling a building. c. Payment of dividends to stockholders. d. Receipt of cash from bank borrowing.
A
Purchasing a building for $110,000 by paying cash of $15000 and signing a note payable for $95000 will A) Increase both total assets and total liabilities by $95,000. B) Increase both total assets and total liabilities by $110,000. C) Decrease both total assets and total liabilities by $15,000. D) Decrease total assets and increase total liabilities by $15,000.
A
Receivables Turnover Ratio? A. Net Credit Sales/Average AR B. 365/ Inventory Turnover Ratio C. Beginning Inventory + Purchases - Ending Inventory D. COGS available/# of Units Available
A
Refer to the information in the previous question. What is the amount of net revenues (total revenue minus sales discounts) as of August 12? a. $4,850 b. $5,000 c. $5,150 d. $5,300
A
Samson Company had the following balances and transactions during 2015. January 1 Beginning inventory: 20 units at $70 each March 10 Purchased 10 units at $80 each June 10 Sold 23 units for $100 each 7) What would Samson Company's inventory amount be on December 31, 2015 if the LIFO method was used? A) $490 B) $510 C) $525 D) $560
A
Smith Farms purchases a combine on January 1, 2015 for $50,000. Using the double declining balance method for depreciation, a 5 year lifetime and a $5,000 salvage value, what would be the book value of the combine December, 31, 2016? A) $18,000 B) $20,000 C) $22,000 D) $30,000
A
The Astroids Company records show the following aging of accounts receivable: Days 0‑30 31‑60 61‑90 90+ Amount $2,000 $1,000 $ 500 $ 100 % Estimated Uncollectible 5% 20% 30% 50% If the balance in the Allowance For Doubtful Accounts is a credit of $50 before adjustment, the Bad Debt Expense for the period is: a. $ 450 b. $ 500 c. $ 550 d. $1400
A
The effect of writing off a specific account receivable is: a. A reduction in the allowance for uncollectible accounts. b. An increase in the amount of accounts receivable. c. An increase in the amount of bad debt expense. d. An increase in the allowance for uncollectible accounts.
A
The ending inventory for Misty Harbor Co. is $57,000. If beginning inventory was $68,000 and goods available for sale totaled $117,000, the cost of goods sold is: A) $60,000 B) $128,000 C) $68,000 D) $49,000 E) none of the above
A
The following statements regarding perpetual inventory and periodic inventory methods of handling merchandise are all correct except (choose one): a. A perpetual inventory method makes it unnecessary to take a physical count of inventory on hand. b. The perpetual inventory method offers better inventory control and more accurate determination of cost of goods sold than the period inventory method. c. The periodic inventory method is based upon the assumption that goods that were acquired and are not on hand have been previously sold. d. The periodic inventory system is less expensive to operate but may lead to inefficiencies.
A
Those obligations of a firm that must be either paid in cash or settled by providing goods or services within one year are referred to as: A) Current liabilities. B) Accounts payable. C) Notes payable. D) Bonds payable. E) Current assets.
A
Using a periodic inventory system, the sale of inventory on account would be recorded as: a. Debit Cost of Goods Sold; credit Inventory. b. Debit Inventory; credit Sales Revenue. c. Debit Sales Revenue; credit Accounts Receivable. d. Debit Inventory; credit Accounts Receivable.
A
What is a direct purpose of internal controls? a. To improve the accuracy and reliability of accounting information. b. To help managers determine which projects are likely to be more profitable. c. To assist top executives in planning employment capacity. d. To minimize tax payments to the Internal Revenue Service (IRS).
A
Which of the following financial statements illustrates the fundamental accounting equation? a. The Balance Sheet b. The Income Statement c. The Statement of Cash Flows d. The Statement of Owners Equity e. The Statement of Retained Earnings
A
Which of the following transactions would result in an account receivable? a. Providing services to customers on account. b. Paying for supplies previously purchased on account. c. Receiving a loan from the bank. d. Purchasing supplies on account.
A
Which of the following values is used to report Accounts Receivable on the Balance Sheet? A) Net Realizable Value B) Present Value C) Market Value D) Historical Cost
A
You received a 4-month, 6%, $10,000 note on 10/1/2015. Your accounting period starts at 1/1 and ends at 12/31. How much interest revenue did you earn during 2015 on this note? a. $150 b. $50 c. $200 d. $600
A
A delivery truck costing $8,000 with a salvage value of $500 and an estimated useful life of 5 years was purchased on January 1, Year 1. Accumulated Depreciation balance, at the end of Year 2, straight line method would be a. $1,500 b. $3,000 c. $3,200 d. $3,700
B
A delivery truck costing $8,000 with a salvage value of $500 and an estimated useful life of 5 years was purchased on July 1 of Year 1. Depreciation Expense, Year 1, double‑declining balance method would be a. $1,500 b. $1,600 c. $3,000 d. $3,200
B
A two year insurance policy in the amount of $2,400 was purchased on Feb 1, 2015 and was recorded by debiting the prepaid insurance account. At the end of its fiscal year at June 30, 2015, the firm will have to recognize insurance expense of : a. $2400 b. $500 c. $1900 d. $1100
B
After initially recording a transaction, the data are then copied or posted to which of the following? a. Chart of Accounts b. Ledger c. Trial Balance d. Journal
B
At any given time, the amount of cash in the petty cash fund should equal: a. All vouchers written during the accounting period. b. The established balance of the fund less all vouchers written during the accounting period. c. The amount of cash withdrawn from the fund during the accounting period. d. The amount of cash used to establish the fund.
B
At the end of a reporting period, Gaston Corporation determines that its ending inventory has a cost of $6,500 and a market value of $5,800. The adjustment to write down inventory to market value would include: a. A debit to inventory for $5,800. b. A credit to inventory for $700. c. A debit to cost of goods sold for $5,800. d. A credit to cost of goods sold for $700.
B
Average Days in Inventory? A. COGS/Average Inventory B. 365/ Inventory Turnover Ratio C. Gross Profit/ Net Sales D. COGS available/# of Units Available
B
Double Depreciation Method? A. 365/ Receivables Turnover Ratio B. Asset Cost x 2 / Service Life C. Asset Cost - Residual value / Service Life D. COGS available/# of Units Available
B
Equipment originally costing $65,000 has accumulated depreciation of $25,000. If the equipment is sold for $50,000, the company should record: a. No gain or loss. b. A gain of $10,000. c. A loss of $10,000. d. A loss of $15,000.
B
Espana Van Conversions had credit sales of $2,000,000 during Year 1. On 12/31/Year 1, the balance in Accounts Receivable was $81,000. The company estimates bad debts to equal 1% of credit sales. What effect will the company's 12/31 adjusting entry have on the company's income statement and balance sheet? a. Decrease income by $20,000; no effect on balance sheet b. Decrease income by $20,000; decrease assets by $20,000 c. No effect on either income statement or balance sheet d. None of the above.
B
Given: Assets-Jan.1,2015 $320 Liabilities- Jan. 1, 2015 $140 Assets-Dec. 31, 2015 $350 Revenues in 2015 $75 Expenses in 2015 $60 What is Net income in 2015? A) $10 B) $15 C) $20 D) $75 E) $60
B
If 1 year of rent paid in advance on January 1. 2015 was debited to prepaid rent, what adjusting entry is needed to adjust on 1/31/2015? A) Debit prepaid rent, credit cash. B) Debit rent expense, credit prepaid rent. C) Debit rent expense, credit unearned rent. D) Office supplies expense.
B
If net income is $80,000, dividend is $ 24,000, and ending RE balance is $105,000. How much is beginning RE? A) $81 B) $49 C) $1 D) $25
B
In 2015, First Company purchased Second Company for $16,000,000 cash. At the time of purchase Second Company has assets with a fair value of $18,500,000 and liabilities with a fair value of $11,000,000. Calculate the amount paid for goodwill: $10,500,000 $8,500,000 $3,500,000 $0.
B
Land is purchased for $62,500. Back taxes paid by the purchaser were $7,500; total costs to demolish an existing building were $11,000; fencing costs were $12,500; and lighting costs were $1,500. What is the cost of the land? A) $62,500 B) $81,000 C) $93,500 D) $95,000
B
Marketable securities purchased on June 1, 2015 for $85,000 were valued at $80,000 on December 31, 2015. The securities were sold at beginning of 2016 for $83,000. The 2016 income statement should report a(n): A) Realized loss of $2,000. B) Realized gain of $3,000. C) Unrealized loss of $5,000 and a realized gain of $3,000. D) Unrealized gain recovered of $3,000.
B
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30. Frederickson pays for the services on August 12. What amount would Sanders record as revenue on August 4? a. $4,850 b. $5,000 c. $5,150 d. $5,300
B
On September 1, Bates Supplies borrows $30,000 from Vines Incorporated by signing an 8% note due in 12 months. Calculate the amount of interest revenue Vines will record on December 31, four months after the note is issued. a. $0 b. $800 c. $1,600 d. $2,400
B
Sarbanes-Oxley Act (SOX) was passed in response to: a. Increasing inflation. b. Corporate scandals involving unethical behavior of top executives. c. Increasing pressure of foreign competition for American products and services. d. The establishment of the Securities and Exchange Commission (SEC).
B
Suppose Windell Corporation understates its ending inventory amount. What effect will this have on the reported amount of net income in the year of the error? a. Overstate net income. b. Understate net income. c. Have no effect on net income. d. Not possible to determine with information given.
B
Suppose the balance of the allowance for uncollectible accounts at the end of the current year is $800 (credit) before any adjustment entry. The company estimates future uncollectible accounts to be $5,600. At what amount would bad debt expense be reported in the current year's income statement? a. $800 b. $4,800 c. $5,600 d. $6,400
B
The asset's cost less accumulated depreciation is called: a. Replacement cost. b. Book value. c. Net fair value. d. Residual value.
B
The correct equation (COGS model) that applies to the computation of cost of goods sold is A) Beginning inventory - purchases + ending inventory = cost of goods sold. B) Beginning inventory + purchases - ending inventory = cost of goods sold. C) Beginning inventory + purchases + ending inventory = cost of goods sold. D) None of the above.
B
Which of the following accounts is increased with a debit? a. Unearned revenue b. Prepaid expense c. Service revenue d. Retained earnings
B
Which of the following generally would be considered a good internal control over cash payments? a. Employees responsible for making cash disbursements should also be in charge of cash receipts. b. Ensure checks are serially numbered and signed only by authorized employees. c. The employee who authorizes payment should also be the employee who prepares the check. d. Require only one signature for larger checks.
B
Which of the following is not a capital expenditure? A) The addition of a building wing B) A tune-up of a company vehicle C) A complete overhaul of an air-conditioning system D) Replacement of an old motor with a new one in a piece of equipment E) The cost of installing a piece of equipment
B
Which of the following statements is false regarding the amortization of intangible assets? a. Intangible assets with a limited useful life are amortized. b. The service life of an intangible asset is always equal to its legal life. c. The expected residual value of most intangible assets is zero. d. Goodwill is the most common intangible asset with an indefinite useful life.
B
Which of the following will result in higher depreciation expense in the first year of the asset's life? a. Short service life, high residual value, and straight-line depreciation. b. Short service life, low residual value, and double-declining balance depreciation. c. Long service life, low residual value, and straight-line depreciation. d. Long service life, high residual value, and double-declining balance depreciation
B
1 Which of the following is a requirement of the Sarbanes-Oxley Act? a) The outside auditor must issue an internal control report for each public company, and the Public Company Oversight Board evaluates the client's internal controls. b) The Public Company Oversight Board issues an internal control audit report for every publicly held company. c) Accounting firms may not both audit a public client and also provide certain consulting services for the same client. d) Public companies oversee the work of auditors of other public companies.
C
A machine with an original cost of $6,000, an expected useful life of 5 years, and salvage value of $500, is depreciated by the straight line method. The machine was purchased on January 1, 2015. On July 1, 2017, the machine is sold for $2,500. The entry to record the sale will include? A) a loss of $500 B) a gain of $500 C) a loss of $750 D) a gain of $750
C
An example of a contra- asset account is: a. Prepaid insurance b. Income summary c. Accumulated depreciation d. Taxes payable e. Unearned revenue
C
At the beginning of the year, Dawnetta Fashions has total accounts receivable of $300,000. By the end of the year, Dawnetta reports total credit sales of $1,500,000 and total accounts receivable of $200,000. What is the receivables turnover ratio for Dawnetta Fashions? a. 1.5 b. 5.0 c. 6.0 d. 7.5
C
Cost of Goods Sold? (COGS) A. COGS/Average Inventory B. 365/ Inventory Turnover Ratio C. Beginning Inventory + Purchases - Ending Inventory D. COGS available/# of Units Available
C
Depreciation in accounting is the: a. Decrease in fair value of an asset. b. Decrease in selling price of an asset. c. Allocation of an asset's cost to an expense over time. d. Change in fair value of an asset.
C
Financing cash flows would include which of the following? a. Payment of salaries to employees. b. Sale of services to customers for cash. c. Repayment of long-term borrowing to the bank. d. Purchase of equipment for cash for company operations.
C
Gross Profit Ratio? A. COGS/Average Inventory B. 365/ Inventory Turnover Ratio C. Gross Profit/ Net Sales D. COGS available/# of Units Available
C
How does the buyer's accountant record transportation charges on a shipment labeled FOB shipping point, and who pays the charges? The charges were paid with cash. A) No entry is made, because the seller pays the shipping charges. B) Debit Transportation Expense, Credit cash, because the buyer pays the shipping charges. C) Debit Inventory, Credit cash, because the buyer pays the shipping charges. D) Debit Sales Revenue, Credit cash, because the buyer pays the shipping charges.
C
JDC purchased inventory for $5000 and also paid a $300 freight in bill. JDC returned half the goods to the seller and later took a 2% purchase discount. What is JDC's cost of the inventory that it kept? A) $2700 B) $2800 C) $2750 D) $2500
C
Managers should act: a. As creditors of the company. b. As owners of the company. c. As stewards of the company's assets. d. In their own best interest.
C
Regan Corporation's December 31, 2015, ending inventory was understated by $42,000. What effect will this understatement have on total assets and net income for 2015? Assets Net income A understate No effect B No effect No effect C understate understate D No effect overstate
C
Return on Assets? A. Asset Cost - Residual Value / expected use of the year B. Asset Cost x 2 / Service Life C. Profit Margin x Asset Turnover D. Depreciable cost/ total units expected to be produced
C
Samson Company had the following balances and transactions during 2015. January 1 Beginning inventory: 20 units at $70 each March 10 Purchased 10 units at $80 each June 10 Sold 23 units for $100 each December 31 Replacement cost: $75 each 9) What would Samson Company's inventory amount be on December 31, 2015 if the FIFO method was used with lower of cost or market? A) $490 B) $510 C) $525 D) $560
C
Straight Line Method? A. 365/ Receivables Turnover Ratio B. Asset Cost x 2 / Service Life C. Asset Cost - Residual value / Service Life D. COGS available/# of Units Available
C
Tasty Inn and Out incurred the following costs related to its purchase of equipment. Cost of the equipment $10,000 Sales tax (7%) 700 Annual property insurance 500 Shipping 200 Installation 1,000 Total costs $12,400 What is the recorded cost of the equipment? a. $10,000 b. $10,700 c. $11,900 d. $12,400
C
The following information is from the 2015 records of Armadillo Camera Shops. Accounts Receivable, December 31, 2015 $330,000 (debit) Allowance for uncollectible accounts, January 1, 2015 30,000(credit) Net sales for 2015 1,500,000 Accounts written off as uncollectible during 2015 25,500 Uncollectible accounts expense is estimated by the percent-of-sales method. Management estimates that 2% of net sales are uncollectible. Which of the following will be the 12/31/15 balance in the allowance for uncollectible accounts? A) $25,500 B) $30,000 C) $34,500 D) $30,500
C
Under the direct write-off method, bad debt expense is reported: a. When an account receivable is estimated to be uncollectible. b. When an account receivable is initially recorded. c. When an account receivable is proven uncollectible. d. When the allowance for uncollectible accounts is established.
C
We initially record long-term assets at the: a. Cost of the asset. b. Fair value. c. Cost of the asset plus all costs necessary to get the asset ready for use. d. Cost of the asset but subsequently adjusted up or down to fair value.
C
When preparing a bank reconciliation, nonsufficient funds (NSF) checks would be: a. Added to the company's cash balance. b. Added to the bank's cash balance. c. Subtracted from the company's cash balance. d. Subtracted from the bank's cash balance.
C
Which accounts appear on which financial statement? Balance sheet Income statement A. Receivables, land payables Revenues, supplies B. Cash, revenues, land Expenses, payables C. Cash, receivables, payables Revenues, expenses D. Expenses, payables, cash Revenues, receivables, land
C
Which inventory cost flow assumption generally results in the lowest reported amount for inventory when inventory costs are rising? a. Specific identification. b. First-in, first-out (FIFO). c. Last-in, first-out (LIFO). d. Average cost.
C
Which of the following expenditures should be recorded as an expense? a. An addition. b. An improvement. c. Ordinary repairs and maintenance. d. Successful legal defense of an intangible asset.
C
Which of the following journal entries would be recorded if a business received cash of $600 on account for services performed at an earlier date? A) Cash 600 Service Revenue 600 B) Accounts Receivable 600 Service Revenue 600 C) Cash 600 Accounts Receivable 600 D) Service Revenue 600 Accounts Receivable 600
C
A company received a bank statement with a balance of $5,350. Reconciling items included a bookkeeper error of $200 (a $300 check recorded as $500), two outstanding checks totaling $720, a service charge of $15, a deposit in transit of $180, and interest revenue of $21. What is the adjusted balance? A) $4,636 B) $4,610 C) $5,016 D) $4,810
D
Activity Based Depreciation per unit? A. 365/ Receivables Turnover Ratio B. Asset Cost x 2 / Service Life C. Asset Cost - Residual value / Service Life D. Depreciable cost/ total units expected to be produced
D
An increase in an expense account could be balanced in a journal entry by: A) A decrease in a revenue account. B) A decrease in a liability account. C) A decrease in equity. D) A decrease in an asset account.
D
At the West Texas Clothing Store, a sales employee assists customers with finding the items the customer wishes to purchase, then rings up the purchase and collects the cash. At the end of the day, this employee counts the cash and fills out a cash-count form. Which internal control procedure is being violated by West Texas Clothing Store? A) Competent, reliable, and ethical personnel should be hired. B) Job rotation improves internal control. C) To validate their accounting records, a company should have an audit by an external accountant. D) Separation of duties is necessary.
D
At the beginning of the year, Johnson Supply has inventory of $5,200. During the year, the company purchases an additional $20,000 of inventory. An inventory count at the end of the year reveals remaining inventory of $3,000. What amount will Bennett report for cost of goods sold? a. $8,200 b. $17,800 c. $20,000 d. $22,200
D
At the end of an accounting period, the office supplies account shows a balance of $500, but the actual supplies on hand amount to only $300. If this situation calls for an adjusting entry, what account should be debited? A) Office supplies B) Office supplies payable. C) Unused office supplies D) Office supplies expense
D
Given: Assets-Jan.1,2015 $320 Liabilities- Jan. 1, 2015 $140 Assets-Dec. 31, 2015 $350 Revenues in 2015 $75 Expenses in 2015 $60 What are " Liabilities" at December 31, 2015 if no withdrawals or investments were made during the year? (use the information from 2) A) $125 B) $110 C) $170 D) $155
D
Nija Incorporated reports the following aging schedule of its accounts receivable with the estimated percent uncollectible. What is the total estimate of uncollectible accounts using the aging method? Age Group AR Estimated Percent Uncollectible 0-60 days $40,000 1% 61-90 days 15,000 20% 90+ 5,000 60% Total $60,000 a. $400 b. $3,000 c. $3,400 d. $6,400
D
Revenues total $10,200. Expenses total $7,300. Dividends declared and paid total $2,600. What is the balance in the revenues account after closing the temporary accounts to retained earnings account? A) Credit balance of $2,900 B) Credit balance of $ 300 C) Credit balance of $10,200 D) Balance of $0
D
Samson Company had the following balances and transactions during 2015. January 1 Beginning inventory: 20 units at $70 each March 10 Purchased 10 units at $80 each June 10 Sold 23 units for $100 each 8) What would Samson Company's inventory amount be on December 31, 2015 if the FIFO method was used? A) $490 B) $510 C) $525 D) $560
D
Suppose the balance of the allowance for uncollectible accounts at the end of the current year is $800 (debit) before any adjustment. The company estimates future uncollectible accounts to be $5,600. At what amount would bad debt expense be reported in the current year's income statement? a. $800 b. $4,800 c. $5,600 d. $6,400
D
The Jupiter Corporation acquired land, buildings, and equipment from a bankrupt company at a lump sum price of $96,000. The appraisal disclosed the following values: Land $60,000 Buildings 40,000 Equipment 20,000 Which of the following amounts would be debited to the Land account? A) $30,000 B) $32,000 C) $46,000 D) $48,000
D
The petty cash fund of $400 was established for minor disbursements. At the end of the month, the fund included petty cash tickets for the purchase of $185 in supplies, $41 for postage, $86 for fuel and a delivery charge of $65 and cash of $23. How much cash is required to replenish the fund? A) $23 B) $226 C) $312 D) $377
D
The return on assets is equal to: a. Net income divided by long-term assets. b. Net income divided by average long-term assets. c. Average total assets divided by net income. d. Net income divided by average total assets.
D
Under a perpetual inventory system: a. Cost of good sold is recorded with a period-end adjusting entry. b. Purchase discounts are not recorded. c. Inventory purchases are recorded only at the end of the period. d. Cost of goods sold is recorded with each sale.
D
Weighted Average Cost? A. COGS/Average Inventory B. 365/ Inventory Turnover Ratio C. Gross Profit/ Net Sales D. COGS available/# of Units Available
D
When preparing a bank reconciliation, outstanding checks would be: a. Added to the company's cash balance. b. Added to the bank's cash balance. c. Subtracted from the company's cash balance. d. Subtracted from the bank's cash balance.
D
Which of following best describes a merchandising company? a. A company whose revenues exceed expenses. b. A company that produces products from raw materials, labor, and overhead. c. A company that provides services to its customers. d. A company that purchases products that are primarily in finished form for resale to customers.
D
Which of the following accounts would appear in the Balance Sheet debit column? A) Unearned service revenue B) Depreciation expense C) Service revenue earned D) Prepaid insurance
D
Which of the following is considered cash for financial reporting purposes? a. Inventory that is likely to be sold within three months. b. Amounts to be collected from customers. c. Amounts owed to suppliers. d. Balances in savings accounts.
D
Which of the following levels of profitability in a multiple-step income statement represents all revenues less all expenses? a. Gross profit. b. Operating income. c. Income before income taxes. d. Net income.
D
A characteristic feature of corporations is A) Limited liability for investors B) Ability to make contracts in its own name C) Ownership rights proportional to shares D) Articles of incorporation E) All of the above
E
Which of the individuals listed below is most interested in financial statements produced in accord with generally accepted accounting principles (GAAP)? A) A manager involved in the operations of a business. B) A loan officer reviewing a loan application. C) An internal revenue agent reviewing the validity of a company's tax return. D) A potential stockholder of a corporation. E) B and D
E
