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The prestige of operating as a corporation
A local retail shop has been operating as a sole proprietorship. The business is growing and now 1) the owner wants to incorporate. Which of the following is not a reason for this owner to
incorporate?
Help clarify information presented in the financial statements
Notes to the financial statements
The time period following the one shown for the income statement
The retained earnings statement shows all of the following except
The claims of owners are called
Stockholders equity
An income statement
presents the revenues and expenses for a specific period of time
Which of the following set of characteristics describes a corporation
Easier to transfer ownership and raise funds, no personal liability
Which of the following would not be considered an internal user of accounting data for a company?
Creditor of the company
In a study session, a classmate makes this statement “dividends are listed as expenses on the income statement” What is your response to this statement?
Dividends represent a portion of corporate profits paid to the shareholders. They belong on the retained earnings statement
Which of the following statements are true
None of these answer choices are correct
If the equipment was sold for $35,000, what would the total of stockholder’s equity be?
B 125,000
The United States and the international standard-setting environment are primarily driven by meeting the needs of
Investors and creditors
Which of the following is not one of the three forms of business organization?
Investors
Net income will result during a time period when
Revenues exceed expenses
A company's total liabilities decreased by $105,000 and its stockholders' equity decreased by $35,000 during a period of time. By what amount and in what direction must the company's total
assets have changed during that same period?
$140,000 decrease
A business organized as a separate legal entity is a
corporation
Which of the following statements is true?
By comparing earnings per share of a single corporation over time, a stockholder can
evaluate the corporation's relative earnings performance.
Earnings per share
a measure of profitability
