Question

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question 1) Which of the following statements is TRUE for a proprietorship? 1)_ A) The business records include the proprietor's personal finances. B) For accounting purposes, a proprietorship is separate from the proprietor C) Legally, a proprietorship is separate from the proprietor. D) All statements are correct. 2) Revenues are: A) increases in retained earnings resulting from delivering goods or services to customers B) decreases in assets resulting from delivering goods or services to customers. increases in liabilities resulting from delivering goods or services to customers D) decreases in retained earnings resulting from delivering goods or services to customers. 3) Accounting 3) - A) is often called the language of business. B) measures business activities. C) processes data into reports and communicates the data to decision makers. D) is all of the above. ) Which financial statement answers the following question: How well did the company perform during the year A) statement of retained earnings B) statement of cash flows income statement D) balance sheet 3) The fair value of a plant asset is equal to: 5). A) the amount of cash paid plus the dollar value of noncash consideration given in exchange for the plant asset at acquisition. 3) the amount the business could sell the asset for the amount a company can receive for the asset when sold in order to go out of business 2) the amount of cash paid plus the loan taken out to finance the purchase of the plant asset Which of the following have unlimited liability for a company's debts?6) ) owners of a corporation limited partners in a limited liability partnership members of a limited liability company ) general partner in a limited liability partnership 7) Which statement(s) reports the revenues, gains, expenses, and losses of an entity? Income statement Statement of retained eamings and statement of operations Balance sheet Statement of cash flows and income statement 8) When total expenses exceed total revenues, the result is: a dividend. B) a net profit. an increase to retained earnings. D) a net loss.

Answer 1

1)Correct option is "B"

The owner and business are two separate entities for accounting purpose but not separate legal entities (As per entity concept )

Thus personal expenses are not recorded for accounting purpose .

2)correct option is "A"

Revenue is an Income earned for rendering services or delivering goods to customers . Thus this income increases the net income and finally closed to retained earning .

Thus revenue increases retained earning

3)correct option is"D" -All of above

i)Accounting is often called language of business as it is means of communicating information about business.

ii)Accounting is a way to measure business activities in monetary as well non monetary terms.

iii)Accounting is a way to process raw data in to financial reports which helps users to make decisions.

4)Correct option is "C"Income statement

Out of three financial statement ,Income statement shows the amount of net income earned or net loss incurred during the period from business activities thus it shows how well organization has performed during the period .