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Unlimited liability is an advantage of a sole proprietorship. × A sole proprietorship is a business owned by one or more persons. ×
As a general rule, revenues should not be recognized in the accounting records until it is received in cash. ×
In the partnership form of business, the owners are called stockholders. ×
The area of accounting aimed at serving the decision making needs of internal users is:
A Financial accounting. B Managerial accounting. C External auditing.
SEC reporting.
Bookkeeping.
The accounting concept that requires financial statement information to be supported by independent, unbiased evidence other than someones belief or opinion is:
A Business entity assumption. B Monetary unit assumption.
C Going-concern assumption. D Time-period assumption.
E Objectivity
External users of accounting information include all of the following except: A Shareholders.
Customers.
Purchasing managers.
Government regulators. E Creditors.
The accounting assumption that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:
A Time-period assumption.
B Business entity assumption. C Going-concern assumption.
D Revenue recognition principle. E Cost principle.
If a parcel of land that was originally acquired for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000, the land should be recorded in the purchasers books at:
A $95,000.
B $137,000.
C $138,500.
D $140,000.
E $150,000.
The Maxim Company acquired a building for $500,000. Maxim had the building appraised, and found that the building was easily worth $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Maxim to record the building on its records at $500,000?
A Monetary unit assumption. B Going-concern assumption.
C Cost principle. D Business entity assumption. E Rev
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