ACCT 2000 FINAL EXAM BRIGGS NEWEST UPDATE
WITH COMPLETE QUESTIONS AND
ANSWERS/ALREADY GRADED A+
Forms of Business - ANSWER ->1) Sole proprietorship
2) Partnership
3) Corporation
Sole proprietorship - ANSWER ->Advantages-Simple, control, tax
advantages
Disadvantages- personal liability
Partnership - ANSWER ->Advantages- Easy to set up, broader skill set
between two people, tax advantages
Disadvantages- personal liability
Corporation - ANSWER ->Advantages-easy to sell, raise capital, no
liability
Disadvantages-double taxation
Internal Users - ANSWER ->Managers, Chief Financial Officer,
stockholders
Questions internal users might ask - ANSWER ->-Which product line is
more favorable?
-Is cash sufficient to pay dividends?
,-What selling price for our product will maximize net income?
External users - ANSWER ->Auditors, IRS, Lenders, Regulatory
authorities
Who may perform audits? - ANSWER ->CPA
An unqualified opinion - ANSWER ->When the auditor is satisfied that
the financial statements provide a fair representation of the company's
financial position and results of operation in accordance with generally
accepted accounting principles, the auditor will express
3 Types of Activities Business do - ANSWER ->Investing, Financing, and
Operating
Investing Activities - ANSWER ->Buying land, buildings, equipment
Financing Activities - ANSWER ->Issuance of common stock and bonds
payable, preferred stock, treasury stock
Operating Activities - ANSWER ->Buying materials, paying for labor,
selling product
4 financial statements - ANSWER ->1) Income statement
2) Retained Earnings Statement
3) Balance sheet
4) Statement of cash flow
, Income Statement - ANSWER ->Shows if a company gained or lost
money. Has revenues subtracted by expenses to show net income/loss
Retained Earnings Statement - ANSWER ->Shows how much money is
retained in the company.
Balance Sheet - ANSWER ->Reports the assets, liabilities, and equity at a
specific point in time. Groups together similar assets and similar
liabilities using standard classifications
Statement of cash flow - ANSWER ->provide information about cash
receipts, cash payments, and the net change in cash resulting from the
operating, investing, and financing activities of a company during the
period.
Retained Earnings Balance - ANSWER ->Beginning Retained
Earnings+Net income-dividends
Reduced liability for investors - ANSWER ->Which is an advantage of
corporations relative to partnerships and sole proprietorship?
Issuing shares of common stock - ANSWER ->Which of the following is
an example of a financing activity?
Claims of owners - ANSWER ->Stockholder's equity represents
Balance Sheet - ANSWER ->Which statement presents information as of
a specific point in time?
WITH COMPLETE QUESTIONS AND
ANSWERS/ALREADY GRADED A+
Forms of Business - ANSWER ->1) Sole proprietorship
2) Partnership
3) Corporation
Sole proprietorship - ANSWER ->Advantages-Simple, control, tax
advantages
Disadvantages- personal liability
Partnership - ANSWER ->Advantages- Easy to set up, broader skill set
between two people, tax advantages
Disadvantages- personal liability
Corporation - ANSWER ->Advantages-easy to sell, raise capital, no
liability
Disadvantages-double taxation
Internal Users - ANSWER ->Managers, Chief Financial Officer,
stockholders
Questions internal users might ask - ANSWER ->-Which product line is
more favorable?
-Is cash sufficient to pay dividends?
,-What selling price for our product will maximize net income?
External users - ANSWER ->Auditors, IRS, Lenders, Regulatory
authorities
Who may perform audits? - ANSWER ->CPA
An unqualified opinion - ANSWER ->When the auditor is satisfied that
the financial statements provide a fair representation of the company's
financial position and results of operation in accordance with generally
accepted accounting principles, the auditor will express
3 Types of Activities Business do - ANSWER ->Investing, Financing, and
Operating
Investing Activities - ANSWER ->Buying land, buildings, equipment
Financing Activities - ANSWER ->Issuance of common stock and bonds
payable, preferred stock, treasury stock
Operating Activities - ANSWER ->Buying materials, paying for labor,
selling product
4 financial statements - ANSWER ->1) Income statement
2) Retained Earnings Statement
3) Balance sheet
4) Statement of cash flow
, Income Statement - ANSWER ->Shows if a company gained or lost
money. Has revenues subtracted by expenses to show net income/loss
Retained Earnings Statement - ANSWER ->Shows how much money is
retained in the company.
Balance Sheet - ANSWER ->Reports the assets, liabilities, and equity at a
specific point in time. Groups together similar assets and similar
liabilities using standard classifications
Statement of cash flow - ANSWER ->provide information about cash
receipts, cash payments, and the net change in cash resulting from the
operating, investing, and financing activities of a company during the
period.
Retained Earnings Balance - ANSWER ->Beginning Retained
Earnings+Net income-dividends
Reduced liability for investors - ANSWER ->Which is an advantage of
corporations relative to partnerships and sole proprietorship?
Issuing shares of common stock - ANSWER ->Which of the following is
an example of a financing activity?
Claims of owners - ANSWER ->Stockholder's equity represents
Balance Sheet - ANSWER ->Which statement presents information as of
a specific point in time?
