ACG 2021 Patterson FSU Exam 1
Study Guide Questions and Actual
Detailed Answers.
Sole proprietorship - Answer A business owned by one person. Simple to set up and gives
you control.
Partnership - Answer A business owned by two or more persons who are associated.
Partners bring unique skills and sometimes the individuals don't have enough resources on their
own.
Corporation - Answer A business organized as a separate legal entity owned by stockholders.
Anyone can become an owner via stocks. Stocks are easy to sell. Easy to raise funds to due to
sale of stock.
Taxes and Legal liability - Answer The three different forms of business organization have
different tax rates and legal liabilities based on who owns the business.
Accounting; Information system that identifies, records, and communicates the economic
events of an organization to interested users. - Answer
Users; People who utilise accounting systems. There are two types. Internal and External users. -
Answer
Internal Users - Answer Managers who plan, organize and run a business. Finance,
marketing, HR, and management.
External Users - Answer Investors who use accounting information to make decisions to buy,
hold, or sell stock. Creditors use this info to evaluate risk. Customers, Unions, regulatory
agencies, etc.
Taxing authorities - Answer External users like the IRS who use accounting info to see if
companies comply with laws.
Ethics in Financial Reporting - Answer Sarbanes Oxley Act (SOX) Management is held
responsible for accuracy of financial information.
Financing Activities - Answer Ways a business organization raises money or capital. Two
ways. Through creditors and common stock.
, Creditors - Answer People you owe money to. Like note or bond payable. Taking a loan from
a bank.
Common Stock - Answer Total amount paid in by stockholders for the shares they purchase.
Selling stock to raise money.
Dividends - Answer Cash payments to stockholders.
Investing Activities - Answer Ways a business uses money to grow or make the business
better through improvements. 4 types of activities.
Assets - Answer Resources owned by a business that are used up to produce something.
Cash - Answer MOst important asset owned by a company. Actual money at hand.
PPE - Answer Property, plant, and equipment. Types of assets.
Investments - Answer Investing money or material for profit.
Operating Activities - Answer Ways a business actually runs, and what is needed for the
business to operate. 5 TYPES.
Revenue - Answer Amounts earned on the sale of products. Three types of revenue. Sales,
service, and interest.
Supplies - Answer Assets used during day to day operations.
Inventory - Answer Assets used for future operations.
Account Receivable - Answer What is owed to the company
Expenses - Answer Cost of assets used in process of generating revenue. COGS, selling,
marketing, administration, taxes, etc.
Net income - Answer Revenues exceed Expense
Study Guide Questions and Actual
Detailed Answers.
Sole proprietorship - Answer A business owned by one person. Simple to set up and gives
you control.
Partnership - Answer A business owned by two or more persons who are associated.
Partners bring unique skills and sometimes the individuals don't have enough resources on their
own.
Corporation - Answer A business organized as a separate legal entity owned by stockholders.
Anyone can become an owner via stocks. Stocks are easy to sell. Easy to raise funds to due to
sale of stock.
Taxes and Legal liability - Answer The three different forms of business organization have
different tax rates and legal liabilities based on who owns the business.
Accounting; Information system that identifies, records, and communicates the economic
events of an organization to interested users. - Answer
Users; People who utilise accounting systems. There are two types. Internal and External users. -
Answer
Internal Users - Answer Managers who plan, organize and run a business. Finance,
marketing, HR, and management.
External Users - Answer Investors who use accounting information to make decisions to buy,
hold, or sell stock. Creditors use this info to evaluate risk. Customers, Unions, regulatory
agencies, etc.
Taxing authorities - Answer External users like the IRS who use accounting info to see if
companies comply with laws.
Ethics in Financial Reporting - Answer Sarbanes Oxley Act (SOX) Management is held
responsible for accuracy of financial information.
Financing Activities - Answer Ways a business organization raises money or capital. Two
ways. Through creditors and common stock.
, Creditors - Answer People you owe money to. Like note or bond payable. Taking a loan from
a bank.
Common Stock - Answer Total amount paid in by stockholders for the shares they purchase.
Selling stock to raise money.
Dividends - Answer Cash payments to stockholders.
Investing Activities - Answer Ways a business uses money to grow or make the business
better through improvements. 4 types of activities.
Assets - Answer Resources owned by a business that are used up to produce something.
Cash - Answer MOst important asset owned by a company. Actual money at hand.
PPE - Answer Property, plant, and equipment. Types of assets.
Investments - Answer Investing money or material for profit.
Operating Activities - Answer Ways a business actually runs, and what is needed for the
business to operate. 5 TYPES.
Revenue - Answer Amounts earned on the sale of products. Three types of revenue. Sales,
service, and interest.
Supplies - Answer Assets used during day to day operations.
Inventory - Answer Assets used for future operations.
Account Receivable - Answer What is owed to the company
Expenses - Answer Cost of assets used in process of generating revenue. COGS, selling,
marketing, administration, taxes, etc.
Net income - Answer Revenues exceed Expense
