ACCT 2810 Fundamentals of Accounting Exam -2026 Verified
Questions & Detailed Solutions | Auburn University
3 types of business-CORRECT ANSWER - service, merchandising, and manufacturing
service business-CORRECT ANSWER - business that provides services rather than products to customers
ex. delta airlines
merchandising business-CORRECT ANSWER - business that purchases finishes products from other
businesses to sell to its customers
ex. walmart
manufacturing business-CORRECT ANSWER - business that changes basic inputs into products that are sold to
its customers
4 forms of business-CORRECT ANSWER - proprietorship, partnership, corporation, and limited liability
company (LLC)
proprietorship-CORRECT ANSWER - business owned by one individual, financial resources are limited to the
individual owner’s resources nontaxable
partnership-CORRECT ANSWER - business owned by two or more individuals, nontaxable
corporation-CORRECT ANSWER - business organized under state or federal statues as a separate legal entity,
has the ability to obtain large amounts of resources by issuing shares of stock, taxable
limited liability company (LLC)-CORRECT ANSWER - form of corporation that combines attributes of a
partnership and a corporation, operates similarly to a partnership, but its owners liability for the debts of the
company is limited to their investment, nontaxable by election
proprietorship and partnership have-CORRECT ANSWER - unlimited liability to creditors for the debts of the
company
, corporations have-CORRECT ANSWER - limited liability to creditors for debts of the company based on their
investment
business stakeholder-CORRECT ANSWER - person or entity with an interest in the economic performance and
well-being of a company
capital market stakeholders-CORRECT ANSWER - providers of major financing for the business to begin and
continue its operations
ex. banks, owners, stockholders
product or service market stakeholders-CORRECT ANSWER - buyers of a product or services and vendors to
the business
ex. customers and suppliers
government stakeholders-CORRECT ANSWER - collect taxes and fees from the business and its employees
ex.federal, state and city governments
internal stakeholders-CORRECT ANSWER - individuals employed by the business
ex. employees and managers
3 business activities-CORRECT ANSWER - financing, investing, and operating
financing activities-CORRECT ANSWER - business activities that involve obtaining funds to begin and operate
a business
ex. paying dividends, repaying loans, issuing common stock
investing activities-CORRECT ANSWER - business activities that involve obtaining the necessary resources to
start and operate the business
ex. buying or selling property, plant, and equipment
operating activities-CORRECT ANSWER - business activities that involve using the business’s resources to
implement its business strategy
Questions & Detailed Solutions | Auburn University
3 types of business-CORRECT ANSWER - service, merchandising, and manufacturing
service business-CORRECT ANSWER - business that provides services rather than products to customers
ex. delta airlines
merchandising business-CORRECT ANSWER - business that purchases finishes products from other
businesses to sell to its customers
ex. walmart
manufacturing business-CORRECT ANSWER - business that changes basic inputs into products that are sold to
its customers
4 forms of business-CORRECT ANSWER - proprietorship, partnership, corporation, and limited liability
company (LLC)
proprietorship-CORRECT ANSWER - business owned by one individual, financial resources are limited to the
individual owner’s resources nontaxable
partnership-CORRECT ANSWER - business owned by two or more individuals, nontaxable
corporation-CORRECT ANSWER - business organized under state or federal statues as a separate legal entity,
has the ability to obtain large amounts of resources by issuing shares of stock, taxable
limited liability company (LLC)-CORRECT ANSWER - form of corporation that combines attributes of a
partnership and a corporation, operates similarly to a partnership, but its owners liability for the debts of the
company is limited to their investment, nontaxable by election
proprietorship and partnership have-CORRECT ANSWER - unlimited liability to creditors for the debts of the
company
, corporations have-CORRECT ANSWER - limited liability to creditors for debts of the company based on their
investment
business stakeholder-CORRECT ANSWER - person or entity with an interest in the economic performance and
well-being of a company
capital market stakeholders-CORRECT ANSWER - providers of major financing for the business to begin and
continue its operations
ex. banks, owners, stockholders
product or service market stakeholders-CORRECT ANSWER - buyers of a product or services and vendors to
the business
ex. customers and suppliers
government stakeholders-CORRECT ANSWER - collect taxes and fees from the business and its employees
ex.federal, state and city governments
internal stakeholders-CORRECT ANSWER - individuals employed by the business
ex. employees and managers
3 business activities-CORRECT ANSWER - financing, investing, and operating
financing activities-CORRECT ANSWER - business activities that involve obtaining funds to begin and operate
a business
ex. paying dividends, repaying loans, issuing common stock
investing activities-CORRECT ANSWER - business activities that involve obtaining the necessary resources to
start and operate the business
ex. buying or selling property, plant, and equipment
operating activities-CORRECT ANSWER - business activities that involve using the business’s resources to
implement its business strategy
