Exam 13: Business Organization and Financial Data

Under Sarbanes-Oxley, to maintain independence, the lead auditor must be changed at least every three years.

Corporate stockholders:

An intangible asset that represents the excess funds paid, when one firm merges with or purchases another, over and above the accounting value of the firm's net assets.

The goal of a business should be:

The U.S. federal government body that oversees the accuracy and truthfulness in public company financial statements.

The goal of any firm should be the maximization of sales.

Proprietorships are the most widely used form although they are generally the smallest organizations in terms of assets.

Agency problems may result from a manager's concerns about any of the following except

For corporations, the principal-agent relationship usually refers to the relationship between:

The most desirable form of business organization in terms of ease of start-up is a corporation.

An increase in a liability account is a source of cash flows.

Corporations are required to pay cash dividends to their common stockholders.

Which of the following forms of organization is not taxed at the owners' personal tax rate?

Shareholder wealth is the market value of a firm's common stock.

A business should begin with a vision or mission statement that is consistent with the planned overall strategy.

Agency costs are the tangible and intangible expenses borne by shareholders because of the actual or potential self-serving actions of managers; and agency costs can include explicit, out-of-pocket expenses.

Profits from a proprietorship are taxed at the corporate income tax rates.

The U.S. federal government body that receives corporations' annual reports is the:

Devaluing a physical asset over the period of its expected life.

The accrued liabilities of a firm are: