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ACCT 229 TAMU Exam 1 Questions and Answers 100% Solved

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ACCT 229 TAMU Exam 1 Questions and Answers 100% Solved business - all activities necessary to provide the members of an economic system with goods and services 3 forms of business organization - -sole proprietorship -partnership -corporation sole proprietorship - one owner advantage: easy t...

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  • October 20, 2024
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  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
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  • ACCT
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ACCT 229 TAMU Exam 1 Questions and

Answers 100% Solved


business - ✔✔all activities necessary to provide the members of an

economic system with goods and services

3 forms of business organization - ✔✔-sole proprietorship

-partnership

-corporation

sole proprietorship - ✔✔one owner

advantage: easy to form

disadvantage: unlimited liability by the owner

partnership - ✔✔two or more owners; profits or losses are divided among

the owners

advantage: easy to form

disadvantage: unlimited liabilitiy

,©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.

corporation - ✔✔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 - ✔✔-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 - ✔✔financing, investing, operating

Financing - ✔✔-how a company pays for growth/expansion/startup

- ex. issuing shares of common stock or borrowing money from bank

investing - ✔✔-purchasing resources to be used in day to day operations

-ex. land, buildings, equipment, patents, etc

operating - ✔✔-activities that earn revenue and generate expenses

-ex. selling goods, paying rent, paying utilities, etc

purpose of accounting - ✔✔to identify, measure, and communicate

information about a company that is useful in making economic decisions

2 types of user group - ✔✔external and internal

, ©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.

external user group - ✔✔-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 - ✔✔-ex. managers, directors, CEO/CFO

-needed info: budget, planning/forcasting

-how they get info: financial statements, managerial accounting

4 types of financial statements - ✔✔1. balance sheet

2. income statement

3. statement of retained earnings

4. statement of cash flows

balance sheet - ✔✔-shows the financial position of the company at a

SINGLE POINT in time

-uses THE accounting equation

THE accounting equation - ✔✔Assets = Liabilities + Stockholder's Equity

Assets - ✔✔resources that will produce a future economic benefit, held by

the company

-ex. cash, accounts receivable, buildings, land, etc

liabilities - ✔✔debt owed to creditors, suppliers, employees, or customers

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