www.cais ALD MULTIPLE CHOICE. Choose the one alternative that the one alternative that best completes the statement 1) What is the primary purpose of financial accounting? A) Measure the probability of the or d er to employees with making decisions B) Determine the amount of tax bilty wed to the gove C) Measure business activities and communicate these measures to extrac to make decisions D) Communicate business activities to interal management 2) Which of the following groups is not among the external use statements are prepared A) Regulators B) Investors C) Creditors. for whom financial D) Managers 3) Which business form has the advantage of limited liability? A) Partnership B) Corporation C) Sole proprietorship D) All business forms share equal limited liability 4) Limited liability means A) Liabilities of a company cannot exceed its assets B) Stockholders of a corporation are not obligated to pay the corporation's debts out of their own pocket C) Companies are not allowed to borrow unless they are profitable. D) Companies are less likely to be sued if they are formed as a corporation 5) The accounting equation is defined as: A) Assets = Liabilities + Stockholders' Equity. B) Net Income = Revenues-Expenses. C) Assets Liabilities - Stockholders' Equity D) Liabilities + Revenues = Assets. 6) The accounts that represent the resources of the company are called: A) Assets. B) Expenses. C) Revenues. D) Liabilities. Debes best defined the the y owes resulting from a transaction C) Pasta D) Am the company experts to collect in the future from customers 3) Expenses are shown in which of the following a Al Statement of stockholdest C) Balance sheet t B) Income statement D) Statement of cash flows. 9) Which of the following accounts A) Accounts Payable C) Accounts Receivable was in the mement of stockholders' equity? B) Supplies A) Common Stock 10) Financial accounting can best be described as a way to A) Tell the financial story of a company B) Calculate the amount of taxes owed to the government C) Determine employee satisfaction with their work environment D) Measure the personal net worth of stockholders 11) 11) The full set of procedures used to accomplish the measurement/communication process of financial accounting is referred to as the: A) Accounting cycle. B) Trial balance. C) General ledger D) Chart of accounts. 12) 12) A list of all account names used to record transactions of a company is referred to as the: A) General journal. B) Balance sheet C) Income statement D) Chart of Accounts 13) 13) When cash payments are made to stockholders, what is the effect on the company's accounts? A) Cash increases and dividends decrease. B) Cash decreases and common stock decreases. C) Cash increases and common stock increases. D) Cash decreases and dividends increase. 14) Which of the following would increase assets and increase liabilities? A) Pay dividends to stockholders. B) Provide services to customers on account. C) Receive a utility bill for the current month. Plan to pay bill beginning of next month. D) Purchase office supplies on account