ACCT 512 Week 4- Midterm Exam (Chs 1-6)

School: Azusa Pacific University - Course: ACCT 512 - Subject: Accounting

Week 4: Midterm Exam (Chs 1-6) Question 1 1 / 1 pts A business organized as a corporation is not a separate legal entity in most states. requires that stockholders be personally liable for the debts of the business. is owned by its stockholders. has tax advantages over a proprietorship or partnership. Question 2 1 / 1 pts Which of the following statements is true? Publicly traded U.S. companies must provide an annual report to their shareholders when operating conditions change significantly. An unqualified independent auditor's report must be included in the annual report. Notes to the financial statements do not need to be included in the annual report because that information is only for internal users. None of these answer choices are correct. Question 3 1 / 1 pts Liabilities of a company are owed to its debtors. owners. creditors.

stockholders. Question 4 1 / 1 pts Assets are resources owned by a business and provide future services or benefits to the business. True False Question 5 1 / 1 pts Which of the following is thebestdefinition of an internal user of accounting information? Investors who use accounting information to decide whether to buy or sell stock Creditors, such as banks, that use accounting information to evaluate the risk of lending money Labor unions who use accounting information to examine the ability of the company to pay increased wages and benefits Managers who use accounting information to plan, organize, and run a business Question 6 1 / 1 pts Most business enterprises in the United States are proprietorships and partnerships. partnerships. corporations. government units. Question 7 1 / 1 pts

The basic accounting equation states that Assets = Liabilities. True False Question 8 1 / 1 pts Which financial statement is prepared first? Balance sheet Income statement Retained earnings statement Statement of cash flows