Exam 1: Business: Whats It All About

Ima Broke is the sole owner of Miracles,Inc.Ima needs another loan from a bank to expand her business.In order to improve the chances of receiving a loan,she decides to report the principal of one of Miracles,Inc.'s loans as contributed capital instead of a liability on the balance sheet.Discuss the ethical issue with Ima's treatment of the loan.

The balance sheet shows the revenues and expenses for the period.

In 2012,Baroque,Inc.,a U.S.corporation,earned profits of $200,000 before taxes.After paying federal income taxes of 30%,all of Baroque's after-tax income was paid to its only shareholder.The federal income tax rate on corporate dividends is 15%.How much tax will Baroque's shareholder pay on these dividends?

A business form in which the partners are not personally liable for the malpractice of any of the other partners is called a ________.

An audit opinion ________.

The statement of cash flows ________.

Indicate the form of organization with which each of the following characteristics is associated by putting an "X" in the appropriate column.More than one form of organization may apply to each.

Using Lox Stock & Bagel Company's financial statement above,determine the amount of the creditors' claims to the company's resources.

Which of the following is true about a corporation?

Audited financial statements have been examined by ________.

The Financial Accounting Oversight Board is the group that oversees the audits of publicly traded companies.

Dividends are ________.

Morris Lest began his business,Graters,Inc.with $10,000 of his savings.Graters borrowed $5,000 from Baroque Bank.Graters bought $3,000 worth of graters.The rent for the store is $1,000 per month.The first month's sales were $4,000 for inventory valued at $2,500.All of the transactions were in cash.Identify the get/give transactions above,and determine if there is an increase or decrease in assets,liabilities,or shareholders' equity.

Below is an income statement for Daily Kneads.Fill in the missing amounts.

Describe the format of the statement of changes in shareholders' equity.

When starting a business you should first ________.

For which organization are owners typically separate from managers and not involved in the day-to-day operations,sometimes resulting in managers making decisions that are not in the best interest of the owner(s)?

The ownership structure of a business includes the following forms ________.