ACCT 521

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 ...

Sole Proprietorship CORRECT ANSWER -one owner -advantage: easy to form -the owner uses it as a separate entity for accounting purposes, but not for legal purposes -unlimited liability Unlimited Liability CORRECT ANSWER The owner is personally and fully responsible for all losses and debts of the business Limited Liability CORRECT ANSWER Can't come after owners for debt Partnership CORRECT ANSWER -two or more owners, which splits up profits and losses -separate entity for accounting ...

What consists of the policies and procedures necessary to ensure Operations, Reporting, and Compliance Objectives? CORRECT ANSWER Internal Control System What ensures the safeguarding of a company's assets & making sure operations are effective and efficient; Making sure Day-to-Day operations continue uninterrupted? CORRECT ANSWER Operations Objectives What ensures the reliability of accounting records; SOX and GAAP? CORRECT ANSWER Reporting Objectives What ensures compliance with laws ...

Materiality CORRECT ANSWER The dollar magnitude of the transaction makes a difference in how it is recorded. Record as an expense not an asset. No party would be mislead. Ex. buying a 10 dollar trash can Monetary Unit CORRECT ANSWER Only transactions that can be expresses in terms of money can be included in the accounting records. Time Period Assumption CORRECT ANSWER The long life of a company can be reported over a series of shorter time periods. Makes it possible to prepare the income...

3 types of businesses CORRECT ANSWER sole proprietorship, partnership, corporation unlimited liability CORRECT ANSWER sole proprietorship & partnership limited liability CORRECT ANSWER corporation Sole Proprietorship CORRECT ANSWER one owner advantage: easy to form separate entity for accounting purposes not a separate entity for legal purposes or tax purposes Partnership CORRECT ANSWER two or more owners separate entity for accounting purposes not a separate entity for legal o...