Exercise 11 Distingulshing business organizations LO2 Presented below are descriptions of several different business organizations Determine whether the situation described refers to a sole proprietorship partnership or corporation a Ownership of Cola Corp is divided into 1000 shares b Text Tech is owned by Kimberly Fisher who is personally liable for the debts of the business c Jerry Forrentes and Susan Montgomery own Financial Services a financial and personal services provider Neither Forrentes nor Montgomery has personal responsibility for the debts of Financial Services d Nancy Kerr and Frank Levens own Runners a courier service Both Kerr and Levens are personally liable for the debts of the business e MRS Consulting Services does not have a separate legal existence apart from the one person who owns it f Biotech Company has one owner and does not pay income taxes g Lorby lechnologies has two owners and pays its own income taxes Exercise 12 Users of accounting Information 9 LO3 You are working parttime at Starbucks while you are taking an introductory accounting course You have learned that accounting information is useful to many users Identify four external and four internal users for Starbucks financial information For each user describe what decisions accounting information can help them make specific to Starbucks Page 71 Exercise 15 Accounting principles LOS Match each of these numbered descriptions with the term it best describes Indicate your answer by writing the letter for the correct principlestandard in the blank space next to each description a Historical cost accounting standard b Reporting entity principle c Revenue recognition principle d Going concern assumption 1 Requires every business to be accounted for separately from its owner or owners 2 Requires financial statement information to be based on costs incurred in transactions 3 Requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold 4 Requires revenue to be recorded only when the earnings process is complete