1. Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?
a. Most common form of organization.
b. Reduced legal liability for investors.
c. Harder to transfer ownership.
d. Lower taxes.
2. The group of users of accounting information charged with achieving the goals of the business is its
a. Managers
b. auditors.
c. Investors
d. Creditors
3. Which of the following financial statements is concerned with the company at a point in time?
a. Retained Earnings statement.
b. Balance sheet.
c. Statement of cash flows.
d. Income statement.
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.
5. The most important information needed to determine if companies can pay their current obligations is the
a. relationship between current assets and current liabilities.
b. relationship between short-term and long-term liabilities.
c. net income for this year.
d. projected net income for next year.