Intro to Financial Statements
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Intro to Financial Statements

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@MarvellousSard

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Questions and Answers

What is a sole proprietorship?

  • A business owned and controlled by two or more persons
  • A business that is traded on an organized stock exchange
  • A business that is a separate legal entity
  • A business owned and controlled by one person (correct)

    • Which form of business organization is characterized by shared control and broader skills & resources?

  • Sole proprietorship
  • Partnership (correct)
  • Limited liability company
  • Corporation

    • What is a key characteristic of a corporation?

  • Easier to transfer ownership (correct)
  • Owned and controlled by one person
  • Lower income taxes than proprietorships and partnerships
  • Simple to establish

    • Which statement about hybrid forms of organization is true?

    <p>They combine the tax advantages of partnerships with the limited liability of corporations</p> Signup and view all the answers

    Who are the external users of accounting information?

    <p>Investors (owners)</p> Signup and view all the answers

    What is the purpose of financial information?

    <p>To provide inputs for decision-making</p> Signup and view all the answers

    What do data analytics help us answer?

    <p>What happened &amp; why did it happen</p> Signup and view all the answers

    What is a characteristic of limited liability companies (LLCs)?

    <p>Combine the tax advantages of partnerships with the limited liability of corporations</p> Signup and view all the answers

    What is a common characteristic of all types of companies with regards to data analytics?

    <p>Analyzing data, often employing both software and statistics, to draw inferences</p> Signup and view all the answers

    What is a characteristic that sets corporations apart from proprietorships and partnerships?

    <p>A corporation’s revenue is many times greater than other forms of organization.</p> Signup and view all the answers

    What was the purpose of the Sarbanes-Oxley Act (SOX)?

    <p>To reduce unethical corporate behavior</p> Signup and view all the answers

    In solving an ethical dilemma, what is the first step?

    <p>Recognize an ethical situation and the ethical issues involved</p> Signup and view all the answers

    What are financing activities primarily focused on?

    <p>Raising money through outside sources</p> Signup and view all the answers

    What are creditors in the context of debt financing?

    <p>The party to whom amounts are owed</p> Signup and view all the answers

    What is the main purpose of Step 3 in solving an ethical dilemma?

    <p>To identify the alternatives and weigh their impact on stakeholders</p> Signup and view all the answers

    What is the role of boards of directors according to the Sarbanes-Oxley Act (SOX)?

    <p>To increase the oversight role of boards of directors</p> Signup and view all the answers

    What is the primary focus of operating activities?

    <p>Performing the day-to-day actions to produce &amp; sell a product</p> Signup and view all the answers

    What is the purpose of identifying and analyzing the principal elements in an ethical situation?

    <p>To identify the alternatives and weigh their impact on stakeholders.</p> Signup and view all the answers

    What are liabilities in the context of debt financing?

    <p>Amounts that are owed</p> Signup and view all the answers

    What was one of the main impacts of Sarbanes-Oxley Act (SOX) on outside auditors?

    <p>Increased penalties for fraudulent financial activity.</p> Signup and view all the answers

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