Exam 1: Business: Whats It All About

For which organization is there double taxation?

Use this financial statement to answer the following question(s): -The financial statement above shows ________.

A sole proprietorship is a company with a single owner.

Managers are required to maximize shareholders' equity in the business,which often requires them to "cook the books."

The Securities and Exchange Commission (SEC)requires all publicly traded companies to have a fiscal yearend of December 31.

Explain the purpose of each financial statement and the type of information found in each statement.

Team Instructions: Divide the class into teams of three or four people.Each team member should work the following problem separately outside of class.Then give the students time in class to compare answers with their teammates and put together a final correct copy of the problem.Each team should turn in only one copy of the problem for grading.All team members will receive the same grade. Part A: Record the transactions in the following accounting equation worksheet by filling in the amount using "()" if the amounts are negative.Also fill in the account title from the list of accounts below (use the abbreviations given): Part B: Using the information from Part A,fill in the missing information on the following financial statements. Part C: Using the transactions and financial statements from Parts A and B,answer the following questions: Part D: Write the name of the one financial statement where the following information is found.

Use this financial statement to answer the following question: This business must be organized as a ________.

All liabilities represent the costs incurred to generate revenues.

An income statement lists assets,liabilities,and shareholders' equity.

A control is an activity performed to minimize or eliminate risk.

To be considered useful,financial information must be relevant and reliable.

Match each of the following with the appropriate definitions. -A financial statement that presents revenues minus expenses to show either a profit or loss.

Mia Hero started her own catering business called Hero's Catering.Analyze each of the following transactions for the first month of business.Prepare an income statement for the month of March. a.Mia contributed $10,000 of her own money to start Mia's catering. b.The business borrowed another $5,000 from the local bank. c.The business rented a kitchen for $1,500 for the month. d.The business spent $1,200 on food,spices and other supplies used during the month. e.The business hired Betty Foit as an assistant chef and paid her $500 for the month. f.The business earned $7,000 in revenues during the month.

To be useful,information must be accurate and reliable.

Good business planning involves the identification of risks such as operating risks and financial risks.

Use this financial statement to answer the following question(s): -Refer to the financial statement above.Assume that this is the company's first year of business.During the year,the company paid $1,000 in dividends to its owner.Net income for the year must have been ________.

A corporation must be owned by two or more people.

Team Shirts,Inc.had the following balances on its balance sheet: During 2012,Team Shirts had revenues of $500,000,expenses of $420,000,and issued $20,000 of new stock.The amount of dividends for 2012 was ________.

The Sarbanes-Oxley Act of 2002 required a new independent board called the Public Company Accounting Oversight Board to be formed to oversee the auditing profession and the audits of public companies.