ACC 561 ACC561 ACC/561 FINAL EXAM (NEW CLASSROOM) SCORE 30/30.....100% correct assured!! - 75747

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Question 1

Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?

a.       Harder to transfer ownership.

b.      Most common form of organization.

c.       Reduced legal liability for investors.

d.      Lower taxes.

Answer: (c) Reduced legal liability for investors.

Question 2

The group of users of accounting information charged with achieving the goals of the business is its

a.       Creditors.

b.      Investors.

c.       Managers.

d.      Auditors.

Answer: (c) Managers.

Question 3

Which of the following financial statements is concerned with the company at a point in time?

a.       Income statement.

b.      Balance sheet.

c.       Retained earnings statement.

d.      Statement of cash flows.

Answer: (b) Balance sheet.

Question 4

An income statement

a.       Reports the changes in assets, liabilities, and stockholders’ equity over a period of time.

b.      Reports the assets, liabilities, and stockholders’ equity at a specific date.

c.       Presents the revenues and expenses for a specific period of time.

d.      Summarizes the changes in retained earnings for a specific period of time.

Answer: (c) Presents the revenues and expenses for a specific period of time.

Question 5

The most important information needed to determine if companies can pay their current obligations is the

a.       Relationship between short-term and long-term liabilities.

b.      Net income for this year.

c.       Projected net income for next year.

d.      Relationship between current assets and current liabilities.

Answer: (d) Relationship between current assets and current liabilities.

Question 6

A liquidity ratio measures the:

a.       Ability of a company to survive over a long period of time.

b.      Short-term ability of a company to pay its maturing oblig

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