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Test Bank for College Accounting 12th Edition Jeffrey Slater by William Jefferson and Brenda Mattison 1 / 4
1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall College Accounting, 12e (Slater) Chapter 1 Accounting Concepts and Procedures 1.1 Learning Objective 1-1 1) The type of business organization that can continue indefinitely is known as a:
- sole proprietorship.
- partnership.
- corporation.
- None of the above
Answer: C
Diff: 2
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
2) The purpose of the accounting process is to provide financial information about:
- sole proprietorships.
- small businesses.
- large corporations.
- All of these answers are correct.
Answer: D
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
3) Accounting provides information to:
- managers.
- government.
- investors.
- All of these answers are correct.
Answer: D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles 2 / 4
2 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 4) Which of the following is a characteristic of a sole proprietorship?
- Business owned by more than one person
- Easy to form
- Each stockholder acts as an owner of the company
- Can continue indefinitely
Answer: B
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
5) A partnership is a business which is:
- easy to form.
- ends with the death of a partner.
- owned by more than one person.
- All of these answers are correct.
Answer: D
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
6) Which is an advantage of a sole proprietorship form of business?
- There is limited personal risk.
- The business can continue indefinitely.
- The owner makes all the decisions.
- All of these answers are correct.
Answer: C
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
7) Which of the following is not a type of business organization?
- Corporation
- Partnership
- Sole proprietorship
- Operation
Answer: D
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles 3 / 4
3 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
8) A corporation:
- can continue indefinitely.
- is owned by stockholders.
- has limited risk to stockholders.
- all of the above.
Answer: D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
9) The Sarbanes-Oxley Act was passed to:
- prevent fraud at public companies.
- replace all of the old accounting procedures with new ones.
- improve the accuracy of the company's financial reporting.
- Both A and C are correct.
Answer: D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
10) A legal firm would be considered a:
- merchandise company.
- manufacturer.
- service company.
- None of the above are correct.
Answer: C
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
11) Generally Accepted Accounting Principles are the procedures and guidelines that must be followed during the accounting process.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
12) The function of accounting includes analyzing, recording, classifying, summarizing, reporting, and interpreting financial information.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking Skills
Learning Outcome: Define accounting terms, accounting concepts and principles
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