14. The three major legal forms of business entity are the sole proprietorship, the partnership,

and the

A merchandiser

B corporation

C. service business

D. small business

15. The Securities and Exchange Commission (SEC regulates the accounting methods and financial reporting of

corporations.

A. all

B. multimillion dollar

C. privately held

D. publicly owned

16. Accountants normally choose to practice in one of three areas: public accounting, managerial accounting, or

accounting.

A. not-for-profit

B. governmental

C financial

D. tax

17. A form of business entity owned by two or more people is called a(n)

A corporation

B. sole proprietorship

C. partnership

D. limited liability company

18. The people, companies, or government agencies to whom a firm owes money are called

A. creditors

B. debtors

C. purchasing agents

D. partners

19. The

(GAAP) must be followed by publicly owned companies and are changed

and refined in response to changes in the environment in which businesses operate

A. general accounting & auditing principles

B. generally accepted auditing principles

C. governmental accounting & auditing principles

D. generally accepted accounting principles

20. The property that a business owns is referred to as its

A. assets

B. liabilities

C. owner's equity

D. capital

21. When a business sells services for cash, assets increase and revenue

A. increases

B. decreases

C. is unchanged

D. may either increase or decrease

22. When revenue and expenses are equal, the firm is said to

A. break even

B. be profitable

C. experience a loss

D. experience a gain

23. The balance sheet shows:

A. the results of business operations.

B. all revenues and expenses.

C. the amount of net income or loss.

D. the financial position of a business at a given time.

24. Ginger Yale Ice Company receives money from a customer on account. Recording this transaction will:

A. increase Accounts Receivable.

B. decrease G. Yale, Capital.

C. decrease Accounts Payable.

D. increase Cash.

25. If the beginning capital balance for William's Consulting Service is $26,150, net income i $4,000, and the ending capital balance is $22,800, what were the withdrawals for the peri

A. $650

B. $3,350

C. $7,350

D. $22,800

26. If an owner gives personal tools to the business, how is the transaction recorded?

A. This is not a transaction and is not recorded.

B. This is a decrease in the owner's equity in the business.

C. This is an additional investment by the owner recoded at the cost of the tools to the owner.

D. This is an additional investment by the owner recoded at the fair market value of the tools

27. If a business issues a check for $100 to purchase office supplies, what is the effect on the accounting equation?

A. Owner's Equity will increase

B Assets will decrease

C. Owner's Equity will decrease

D. Total Assets will remain the same

28. At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $11,650; Prepaid Insurance, $550; Equipment, $26,800 and Cash, $21,950. On the same date, SloMo owed the following creditors: Simpson Supply Company, $17,600, Allen Office Equipment, $15,100.

The total assets for the SloMo Delivery Service are:

A. $48,750

B. $33,600

C. $60,950

D. $34,150

29. At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $11,450; Prepaid Insurance, $510; Equipment, $26,400 and Cash, $21,750. On the same date, SloMo owed the following creditors: Simpson Supply Company, $17,200;, Allen Office Equipment, $14,700.

The total amount of Liabilities is:

A. $14,700

B. $26,400

C. $21,750

D. $31,900

are kept for each asset and liability

30. Separate written records called and for the owner's equity of a business.

A. accounts

B. classifications

C. trial balances

D. financial statements