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ACCT 2000 LOWE-ARDOIN (ACTUAL 2025/2026)
EXAM 1 NEWEST QUESTIONS AND WITH VERIFIED
ANSWERS /GRADED A+
Which forms of business organization are considered to be separate accounting
entities?
A. Sole proprietorships and partnerships only
B. Partnerships and corps only
C. only corps
D. Sole proprietorships, corps, and partnerships - (answers)D. Sole
proprietorships, corps, and partnerships
Which of the following did not result from the Sarbanes-Oxley Act?
A. Top management must now certify the accuracy of financial information
B. Penalties for fraudulent activity increased.
C. Increased independence of the outside auditors
D. Tax rates on corps increased. - (answers)D. Tax rates on corps increased
The payment of dividends is an example of a
A. operating activity
B. financing activity
C. investing activity
D. delivery activity - (answers)B
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What kind of classification is cost of goods sold?
A. Asset
B. Expense
C. Liability
D. Revenue - (answers)B. Expense
What section of a cash flow statement shows the cash spent on new equipment
during the past accounting period?
A. the investing section
B. the operating section
C. the financing section
D. the cash flow statement does not give this information - (answers)A. the
investing section
If total liabilities decreased by $15,000 and stockholders' equity increased by
$5,000 during a period of time, then total assets must change by what amount
and direction during that same period?
A. $20,000 increase
B. $10,000 decrease
C $10,000 increase
D. $15,000 decrease - (answers)B
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Which is not one of the three forms of business organization?
A. sole proprietorship
B. creditorship
C. partnership
D. Corp - (answers)B
What is an advantage of corps relative to partnerships and sole proprietorships?
A. increased difficulty of raising funds
B. harder to transfer ownership
C. reduced legal liability for investors
D. most common form of organization - (answers)C
Ease of transferring ownership is a characteristic of which form of business
organization?
A. sole proprietorship
B. partnership
C. Corp
D. All of the above - (answers)C
In which forms of business organizations are the owners personally liable for all
debts of the business?
A. sole proprietorships and corps
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B. sole proprietorships and partnerships
C. Partnership and corp
D. All of the above - (answers)B
The sole proprietorship form of business org
A. must have at least 2 owners in most states
B. generally receives favorable tax treatment relative to a corp
C. Combines the records of the business with the personal records of the owner
D. is classified as a separate legal entity - (answers)B
Which forms of business org are considered to be separate accounting entities?
A. sole proprietorships and partnerships only
B. partnerships and corps only
C. only corps
D. sole proprietorships, corps, and partnerships - (answers)D
To which of the following questions will internal users want answers?
A. what selling price for our product will maximize the company's net income?
B. Which product line is most profitable?
C. Is cash sufficient to pay dividends to stockholders?
D. All of the above - (answers)D
ACCT 2000 LOWE-ARDOIN (ACTUAL 2025/2026)
EXAM 1 NEWEST QUESTIONS AND WITH VERIFIED
ANSWERS /GRADED A+
Which forms of business organization are considered to be separate accounting
entities?
A. Sole proprietorships and partnerships only
B. Partnerships and corps only
C. only corps
D. Sole proprietorships, corps, and partnerships - (answers)D. Sole
proprietorships, corps, and partnerships
Which of the following did not result from the Sarbanes-Oxley Act?
A. Top management must now certify the accuracy of financial information
B. Penalties for fraudulent activity increased.
C. Increased independence of the outside auditors
D. Tax rates on corps increased. - (answers)D. Tax rates on corps increased
The payment of dividends is an example of a
A. operating activity
B. financing activity
C. investing activity
D. delivery activity - (answers)B
,2|Page
What kind of classification is cost of goods sold?
A. Asset
B. Expense
C. Liability
D. Revenue - (answers)B. Expense
What section of a cash flow statement shows the cash spent on new equipment
during the past accounting period?
A. the investing section
B. the operating section
C. the financing section
D. the cash flow statement does not give this information - (answers)A. the
investing section
If total liabilities decreased by $15,000 and stockholders' equity increased by
$5,000 during a period of time, then total assets must change by what amount
and direction during that same period?
A. $20,000 increase
B. $10,000 decrease
C $10,000 increase
D. $15,000 decrease - (answers)B
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Which is not one of the three forms of business organization?
A. sole proprietorship
B. creditorship
C. partnership
D. Corp - (answers)B
What is an advantage of corps relative to partnerships and sole proprietorships?
A. increased difficulty of raising funds
B. harder to transfer ownership
C. reduced legal liability for investors
D. most common form of organization - (answers)C
Ease of transferring ownership is a characteristic of which form of business
organization?
A. sole proprietorship
B. partnership
C. Corp
D. All of the above - (answers)C
In which forms of business organizations are the owners personally liable for all
debts of the business?
A. sole proprietorships and corps
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B. sole proprietorships and partnerships
C. Partnership and corp
D. All of the above - (answers)B
The sole proprietorship form of business org
A. must have at least 2 owners in most states
B. generally receives favorable tax treatment relative to a corp
C. Combines the records of the business with the personal records of the owner
D. is classified as a separate legal entity - (answers)B
Which forms of business org are considered to be separate accounting entities?
A. sole proprietorships and partnerships only
B. partnerships and corps only
C. only corps
D. sole proprietorships, corps, and partnerships - (answers)D
To which of the following questions will internal users want answers?
A. what selling price for our product will maximize the company's net income?
B. Which product line is most profitable?
C. Is cash sufficient to pay dividends to stockholders?
D. All of the above - (answers)D
