1) Which of the following is an internal user of a company's financial information? a) creditors with long-term contracts with the company b) holders of the company's bonds c) stockholders in the company d) board of directors 2) It refers to the process of recording the accounts or transactions of an entity. a) accounting b) bookkeeping c) auditing d) journalizing 3) He is considered as the father of double-entry bookkeeping. a) Devin Pascoli b) Amatino Manucci c) Luca Paciolli d) Jacques Savary 4) The principle that requires every business to be accounted separately and distinctly from its owner/s is known as the: a) going concern b) business entity c) periodicity d) unit of measurement 5) The rule that requires the financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the: a) going concern b) business entity c) periodicity d) unit of measurement 6) Summarizes the cash receipts and cash disbursements for the accounting period. a) balance sheet b) income statement c) capital statement d) cash flow statement 7) Another way of stating the accounting equation is a) Assets - Liabilities = Owner's Equity b) Owner's Equity + Assets = Liabilities c) Assets + Liabilities = Owner's Equity d) Assets = Owners Equity - Liabilities 8) Which is not a service entity? a) car dealer b) law firm c) stock brokerage d) recruitment agency 9) Unlimited liability means a) there is no limit on the amount an owner can borrow b) creditors will absorb any loss form nonpayment of debt c) the owner is responsible for business debts d) the business can borrow money for any type of purchase 10) The order of difficulty and expense, from most to least, when forming a business organization is as follows: a) corporation, sole proprietorship, partnership b) corporation, partnership, sole proprietorship c) partnership, corporation, sole proprietorship d) sole proprietorship, partnership, corporation

Review: Week 1 - 3

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