Intro to Financial Statements

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MarvellousSard
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20 Questions

What is a sole proprietorship?

A business owned and controlled by one person

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

Partnership

What is a key characteristic of a corporation?

Easier to transfer ownership

Which statement about hybrid forms of organization is true?

They combine the tax advantages of partnerships with the limited liability of corporations

Who are the external users of accounting information?

Investors (owners)

What is the purpose of financial information?

To provide inputs for decision-making

What do data analytics help us answer?

What happened & why did it happen

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

Combine the tax advantages of partnerships with the limited liability of corporations

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

Analyzing data, often employing both software and statistics, to draw inferences

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

A corporation’s revenue is many times greater than other forms of organization.

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

To reduce unethical corporate behavior

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

Recognize an ethical situation and the ethical issues involved

What are financing activities primarily focused on?

Raising money through outside sources

What are creditors in the context of debt financing?

The party to whom amounts are owed

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

To identify the alternatives and weigh their impact on stakeholders

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

To increase the oversight role of boards of directors

What is the primary focus of operating activities?

Performing the day-to-day actions to produce & sell a product

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

To identify the alternatives and weigh their impact on stakeholders.

What are liabilities in the context of debt financing?

Amounts that are owed

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

Increased penalties for fraudulent financial activity.

Test your knowledge of different forms of business organizations such as sole proprietorship, partnership, and corporation. Understand the unique characteristics and advantages of each form.

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