basic accounting quiz 242945

1.

The ownership structure of a business includes the following forms ________. (Points : 2)

service, manufacturing, and financial
individual, group, and corporate
sole proprietorship, partnership, and corporationx
debtors, creditors, and owners

2.

Corporations are ________. (Points : 2)

for-profit businesses only
exempt from legal liability
owned by shareholders
manufacturers and not service organizations

3.

Which of the following is legally a separate entity from its owner(s)? (Points : 2)

partnership
sole proprietorship
corporation
Two of these are correct.

4.

The four types of business are ________. (Points : 2)

for profit, nonprofit, wholesale, and retail
service, wholesale, retail, and financial
financial, manufacturing, service, and wholesale
service, merchandising, manufacturing, and financial services

5.

Sara contributes $5,000 of her own money to start her business, Team Shirts, Inc. From Team Shirts’ perspective, it ________. (Points : 2)

is an operating activity
gets ownership and gives up contributed capital
gets cash and gives up stock
gets stock and gives up cash

6.

Revenues include ________. (Points : 2)

the amount received from borrowing
the amount earned from providing goods to customers
the amount earned from providing services to customers
two or more of these

7.

A balance sheet ________. (Points : 2)

describes the financial situation of a company at a specific point in time
is a list of all the cash collected and cash paid during a period
shows the changes that took place in the amount of shareholders’ equity during a period
is a summary of all of the revenues minus all of the expenses for an accounting period

8.

The statement of changes in shareholders’ equity ________. (Points : 2)

describes the financial situation of a company at a specific point in time
is a list of all the cash collected and cash paid during a period
is a summary of all of the revenues minus all of the expenses for an accounting period
shows the changes that took place in the amount of shareholders’ equity during a period

9.

The four financial statements used to report a company’s financial condition include ________. (Points : 2)

balance sheet, statement of earnings, statement of changes in shareholders’ equity, and statement of budgets
income sheet, balance of earnings, statement of changes in shareholders’ equity, and statement of cash flows
balance sheet, income statement, statement of changes in shareholders’ equity, and statement of cash flows
changes in balance sheet, statement of flows, statement of changes in balances, and statement of cash flows

10.

The Team Shirts’ balance sheet has assets of $6,500 and liabilities of $4,000. Its shareholders’ equity is ________. (Points : 2)

$2,500
$10,500
$6,500
$4,000

11.

On March 1, Team Shirts had a beginning balance in retained earnings of $1,200. During March, Team Shirts paid $200 in dividends and had net income of $2,000. The March 31 balance in retained earnings was ________. (Points : 2)

$3,400
$3,200
$1,200
$3,000

12.

Net income flows from ________. (Points : 2)

the statement of cash flows to the income statement
the income statement to the statement of changes in shareholders’ equity
the balance sheet to the statement of cash flows
the income statement to the balance sheet

13.

Which of the following increases retained earnings? (Points : 2)

issuance of stock
revenues
dividends
purchase of inventory

14.

Financial services companies ________. (Points : 2)

deal in services related to money
lend money to consumers to pay for cars and houses
sell insurance to their customers
All of these are correct.

15.

A business in the form of a sole proprietorship ________. (Points : 2)

files its own tax return
is separate and distinct from its owner
is a separate legal entity
is a company with a single owner

16.

Stock sold for the first time is called ________. (Points : 2)

capital
traded
issued
dividends

17.

The stock market is ________. (Points : 2)

where the IRS is located
located in New York City
the general term used to refer to all stock exchanges
where businesses become incorporated

18.

A business form in which the partners are not personally liable for the malpractice of any of the other partners is called a ________. (Points : 2)

partnership
modified sole proprietorship
limited liability partnership
corporation

19.

Dell Inc.’s distribution of earnings to owners is called dividends. Dell must be a ________. (Points : 2)

sole proprietorship
corporation
sole proprietorship or partnership
partnership

20.

For which organization is ownership represented by shares of stock? (Points : 2)

partnership
corporation
sole proprietorship
sole proprietorship and partnership

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