What is the best definition of assets?) Which of the following is not an advantage of the corporate form of business organization?
1) The best definition of assets is the
cash owned by the company.
collections of resources belonging to the company and the claims on these resources.
owners’ investment in the business.
resources belonging to a company that have future benefit to the company.
2) Which of the following is not a liability?
Interest Payable
Accounts Payable
Unearned Service Revenue
Accounts Receivable
3)Which of the following financial statements is divided into major categories of operating, investing, and financing activities?
The statement of cash flows.
The balance sheet.
The income statement.
The retained earnings statement.
4) Ending retained earnings for a period is equal to beginning
Retained earnings + Net income – Dividends.
Retained earnings – Net income + Dividends.
Retained earnings + Net income + Dividends.
Retained earnings – Net income – Dividends.
5) Which of the following is not an advantage of the corporate form of business organization?
Easy to raise funds
No personal liability
Easy to transfer ownership
Favorable tax treatment
6) An advantage of the corporate form of business is that
its owner’s personal resources are at stake.
it has limited life.
its ownership is easily transferable via the sale of shares of stock.
it is simple to establish.
7) A small neighborhood barber shop that is operated by its owner would likely be organized as a
proprietorship.
corporation.
partnership.
joint venture.
8) If services are rendered for cash, then
stockholders’ equity will decrease.
liabilities will increase.
liabilities will decrease.
assets will increase.
9) A revenue generally
leaves total assets unchanged.
increases assets and liabilities.
increases assets and stockholders’ equity.
increases assets and decreases stockholders’ equity.
10) A revenue account
is increased by debits.
is decreased by credits.
is increased by credits.
has a normal balance of a debit.
11) Which accounts normally have debit balances?
Assets, liabilities, and dividends
Assets, expenses, and dividends
Assets, expense, and retained earnings
Assets, expenses, and revenues
12) In recording an accounting transaction in a double-entry system
there must always be entries made on both sides of the accounting equation.
the amount of the debits must equal the amount of the credits.
there must only be two accounts affected by any transaction.
the number of debit accounts must equal the number of credit accounts.
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