1. The earning of a sole proprietorship are (a) not separate from the personal income of the proprietor
2. The Sarbanes-Oxley Act (SOX) (d) requires companies to take responsibility for the accuracy and completeness of their financial reports
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3. One of the characteristic of a limited-liability company (LLC) is: (b) each member of an LLC is liable only for his or her own actions
4. The amount of owner withdrawal for the year is (b) $6,000.
5. The amount of owner’s equity at the end of the year is (c) $ 125,000.
6. The (a) Financial Accounting Standards Board is responsible for the creation and governance of accounting standards in the United States.
7. The calculated amount of total liabilities at the end of the first year is (a) $12,000.
8. The acronym GAAP in the statement refers to (d) Generally Accepted Accounting Principles.
9. The total assets are (d) 110,000.
10. The Public Accounting Oversight Board (PCAOB) was created (a) by the Sarbanes- Oxley Act (SOX)
11. The total liabilities is (b) $190, 000.
12. The TRUE statement of a sole proprietorship is that (b) the sole proprietor is personally liable for the liabilities of the business
13. The correct accounting equation is (b) Assets = Liability + Equity.
14. Managerial accounting provides information to (a) internal decision makers.
15. The $500 earned by Maxwell Plumbing Services is its (a) revenue.
16. The field of accounting that focuses on providing information for external decision makers is (c) cost accounting.
17. (a) Certified public accountants are professional accountants who serve the general public, not one particular company.
18. The effect of the transaction to the accounting equations is that (b) Cash increases and account receivables decreases.
19. The amount that the company should record the building in its accounting records is (c) $425,000.
20. The account that increased as a result of the transaction is (d) Accounts receivables.
