Question :
71. The owner of XYZ Corporation includes his personal liabilities : 1369846
71. The owner of XYZ Corporation includes his personal liabilities with business liabilities. What accounting concept is being violated?
A)Going concern
B)Business entity
C)Monetary unit
D)Periodicity
72. Which of the following led to the need for financial statements to report to owners of a business?
A)The abandonment of a barter economy
B)The expansion of European businesses into Asia and Africa
C)The absence of day-to-day involvement by owners
D)The increased use by business owners of the cash basis of accounting
73. The primary objective of financial reporting is to
A)determine taxable income and income tax of a business.
B)provide management with information needed to run the day-to-day operations of a business.
C)keep businesses from going bankrupt.
D)provide information useful for making economic decisions.
74. Which of the following is a characteristic of a limited-liability partnership (LLP)?
A)One partner cannot be held responsible for the inappropriate actions of another partner.
B)Partners’ personal liability is limited to the amount they have invested in the business.
C)Each partner is liable for the actions of all other partners.
D)As a separate legal entity, the partnership must pay taxes on income.
75. For information to be useful, it must be relevant. Information is relevant when it
A)is verifiable.
B)causes users to reach a different decision.
C)mirrors the true economic situation of a business.
D)is understandable.
76. One of the following is not one of the financial statements required for external reporting
today.
A)Income Statement
B)Balance Sheet
C)Statement of Changes in Working Capital
D)Statement of Changes in Stockholders’ Equity
77. Which of the following is a characteristic of the corporate form of business?
A)Mutual agency
B)Separate legal entity
C)Relatively easy to form
D)Owners have unlimited liability for the debts of the business.
78. Which of the following explains why it is relatively easy for corporations to raise large amounts of money?
A)Owners have unlimited liability for the debts of the business.
B)Close supervision by owners of day-to-day operations
C)Corporations raise capital by seeking relatively small amounts from many people.
D)Corporations are not subject to as much regulation as partnerships and sole proprietorships.
79. What distinguishes partnerships from sole proprietorships?
A)Involvement in day-to-day business activities by owners.
B)The extent of liability for the debts of the business
C)The amount of income tax the entity has to pay
D)Mutual agency (each partner can act for other partners)
80. Which of the following is not a cause for the number of partnerships to be relatively small?
A)Unlimited liability
B)Mutual agency (each partner can act for other partners)
C)Double taxation
D)Difficulty of formation
