1. Prepare a brief description of the purpose of managerial accounting in contrast to financial accounting: 2. Prepare (a) a brief description of the fraud triangle and (b) how it is used. 3. Describe one advantage of the corporate form of business: 4. Describe one disadvantage of the sole proprietorship form of business: 5. A company purchases land by paying cash of $17,000 and promising to pay $125,000 over the next 10 years. Other information that is available to the controller is: The land was originally acquired by the seller for $74,000 The seller is offering to sell the land for $160,000 The purchasing company thinks the market value is actually $197,000 The company properly recognizes the purchase of the land at $142,000. Describe why $142,000 is the correct amount under U.S. generally accepted accounting principles (GAAP). 6. When a company first incorporates and the initial owners invest $1,000,000 cash in the company in exchange for shares of common stock indicate the effect on the accounting equation: Check all that apply. Each line should have one, and only one, check mark. Category ASSETS Current Assets Property, Plant, & Equipment Investments Intangible Assets LIABILITIES Current Liabilities Non-Current Liabilities EQUITY Contributed Capital Earned Capital Revenues Expenses INCREASE DECREASE NO EFFECT 7. Describe retained earnings by listing the components that increase and decrease the account.