ACCT 229 TAMU Exam 1 UPDATED ACTUAL Questions and CORRECT Answers
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Course
ACCT 229
Institution
ACCT 229
ACCT 229 TAMU Exam 1 UPDATED
ACTUAL Questions and CORRECT
Answers
business - CORRECT ANSWER- all activities necessary to provide the members of an
economic system with goods and services
3 forms of business organization - CORRECT ANSWER- -sole proprietorship
-partnership
-corporation
sol...
ACCT 229 TAMU Exam 1 UPDATED
ACTUAL Questions and CORRECT
Answers
business - CORRECT ANSWER- ✔✔all activities necessary to provide the members of an
economic system with goods and services
3 forms of business organization - CORRECT ANSWER- ✔✔-sole proprietorship
-partnership
-corporation
sole proprietorship - CORRECT ANSWER- ✔✔one owner
advantage: easy to form
disadvantage: unlimited liability by the owner
partnership - CORRECT ANSWER- ✔✔two or more owners; profits or losses are divided
among the owners
advantage: easy to form
disadvantage: unlimited liabilitiy
corporation - CORRECT ANSWER- ✔✔business incorporated under the laws of a particular
state. must file a charter and bylaws with the state. board of directors make decisions,
shareholders all have partial ownership
disadvantage: startup effort
advantages of corporation - CORRECT ANSWER- ✔✔-limited liability for all owners
-continuity of life - theoretically goes on forever
-ease in transfer of ownership (stock)
-can raise large amounts of money through selling shares of stock
3 types of business activities - CORRECT ANSWER- ✔✔financing, investing, operating
, Financing - CORRECT ANSWER- ✔✔-how a company pays for growth/expansion/startup
- ex. issuing shares of common stock or borrowing money from bank
investing - CORRECT ANSWER- ✔✔-purchasing resources to be used in day to day
operations
-ex. land, buildings, equipment, patents, etc
operating - CORRECT ANSWER- ✔✔-activities that earn revenue and generate expenses
-ex. selling goods, paying rent, paying utilities, etc
purpose of accounting - CORRECT ANSWER- ✔✔to identify, measure, and communicate
information about a company that is useful in making economic decisions
2 types of user group - CORRECT ANSWER- ✔✔external and internal
external user group - CORRECT ANSWER- ✔✔-ex. investors, shareholders, creditors, IRS
-needed info: stewardship (profitable or not?), valuation, liquidity
-how they get info: quarterly and annual financial statements
internal user group - CORRECT ANSWER- ✔✔-ex. managers, directors, CEO/CFO
-needed info: budget, planning/forcasting
-how they get info: financial statements, managerial accounting
4 types of financial statements - CORRECT ANSWER- ✔✔1. balance sheet
2. income statement
3. statement of retained earnings
4. statement of cash flows
balance sheet - CORRECT ANSWER- ✔✔-shows the financial position of the company at a
SINGLE POINT in time
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