Question: Multiple Choice Questions 1 The form of business in which one

Multiple Choice Questions
1. The form of business in which one individual bears all risk is a:
a. Partnership.
b. Sole proprietorship.
c. Corporation.
d. None of the above.
2. Which form of business issues shares of ownership to the public?
a. Partnership
b. Sole proprietorship
c. Corporation
d. None of the above
3. Which of the following institutions does not play a role in determining GAAP?
a. Securities and Exchange Commission b. Financial Accounting Standards Board
c. The American Institute of Certified Public Accountants
d. All of the above play a role in determining GAAP
4. GAAP stands for:
a. Generally Accepted Auditing Procedures.
b. Governmental Auditing and Accounting Procedures.
c. Generally Accepted Accounting Principles.
d. Guidelines for All Accounting Professionals.
5. In a classified balance sheet, assets are usually classified as:
a. Current assets, longterm investments, fixed assets, intangible assets, other assets.
b. Current assets, property and equipment, longterm investments, shortterm investments, other assets.
c. Shortterm assets, longterm assets, tangible assets, intangible assets.
d. Fixed assets, movable assets, longterm assets, shortterm assets, other assets.
6. Which of the following would not be a current asset?
a. Inventory
b. Accounts receivable
c. Equipment
d. Supplies
7. Which of the following is not included in a calculation of net income?
a. Operating expenses
b. Cost of sales
c. Sales
d. Goodwill
8. Mayer Corporation had sales of $24,000, cost of sales of $10,000, advertising expense of $8,500 and income tax expense of $1,500. What is gross profit?
a. $4,000
b. $14,000
c. $5,500
d. $12,500
9. Mayer Corporation had sales of $24,000, cost of goods sales of $10,000, advertising expenses of $8,500, and income tax expense of $1,500. What is operating profit?
a. $4,000
b. $14,000
c. $5,500
d. $12,500
10. Horizontal analysis:
a. States each account balance as a percentage of a base account.
b. Compares account balances within a year.
c. Does not show trends over time.
d. Compares account balances over time.

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