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Exam 1: Accounting: the Language of Business

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Question 31

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Identify the advantages of forming a business as an S Corporation.

A) owners avoid double taxation and owners have limited liability
B) treated as a separate legal entity and owners avoid double taxation
C) owners have limited liability and corporation's earnings are tax free
D) owner is personally responsible for debts of the business and earnings are reported directly on owner's personal tax return

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Question 32

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The owners and managers of a business are the only users of the financial information.

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Question 33

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Financial information users such as owners,managers and employees,are referred to as ___________________ users.

A firm issues periodic reports called

There are three general services public accountants offer.List and briefly describe each.

Which of the following is a true statement in regards to the International Accounting Standards Board?

The process by which financial information about a business is recorded,classified,summarized,interpreted,and communicated to owners,managers,and other interested parties is called ___________________.

The SEC uses financial information to determine a company's tax base.

The financial statements and the auditor's report must be made available to stockholders of publicly owned corporations.

The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as

Which of the following is NOT part of the process of accounting for financial information?

Accountants provide financial information to various parties so they can make business decisions.

The owners of a corporation are called ___________________.

All financial statements submitted to the SEC by publicly owned corporations must include an auditor's report prepared by

Owners are not personally responsible for the debts of the business if the form of business organization is

Currently,generally accepted accounting principles are developed by the American Institute of Certified Public Accountants (AICPA).

A form of the partnerships business entity is

Anyone can invest in a closely held corporation.

Laws passed by Congress in 1933 and 1934 gave the Securities and Exchange Commission (SEC)final say on matters of financial reporting by publicly owned corporations.

The Securities and Exchange Commission (SEC)requires that publicly owned corporations submit financial statements to it each year.