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1 2 questions 1 amounts owed to the business 39 owners as a result of an initial inv 4297424

 

1.2   Questions

1) Amounts owed to the business' owners as a result of an initial investment are called liabilities.

2) Net income and profit are the same thing.

3) The only way for business to get money is to borrow it.

4) Business owners expect to be compensated for both time and risk.

5) Business owners are paid interest on the money they have invested in the business.

6) Liabilities are defined as:

A) earnings retained in the business.

B) amounts owed to lenders.

C) stockholders' claims to assets.

D) future economic benefits of a company.

7) Assets are defined as:

A) earnings retained in the business.

B) amounts owed to others.

C) stockholders' claims to assets.

D) economic resources of a company.

8) Which of the following does NOT describe Stockholders' Equity?

A) Profits retained in the business

B) Money lent to a business

C) The owners' claim on the assets of a company

D) Money invested in a business by its owners

9) Which of the following is NOT an asset?

A) Net income

B) Inventory

C) Buildings

D) Cash

10) Net income is defined as:

A) revenue plus expenses.

B) revenue less assets.

C) expenses less revenue.

D) revenue less expenses.

11) A company has a policy to pay for meals when an employee has to travel on business. The employee must present a receipt for each meal in order to be reimbursed. The use of a receipt illustrates the:

A) financial accounting standards board.

B) reliability principle.

C) desire of the company to be a good employer.

D) disdain the company has for the employee's truthfulness.

12) Which type(s) of business organization have a single owner?

A) A sole proprietorship is the only type of business organization to have a single owner.

B) A partnership is the only type of business organization to have a single owner.

C) A corporation is the only type of business organization to have a single owner.

D) A sole proprietorship always has a single owner, while a corporation may have a single  owner, it is more likely to have many owners.

 

 

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