Accounting Test 1 Review

Accounting is the language of business

• True

• False

A business owned by one person

Which benefit does not belong for a Corporation?

• Easy to raise capital

• Unlimited life

• Limited personal liability

• Few Government regulations

A business that has one or more owners but also has the benefit of limited personal liability

• Corporation

• Sole Proprietorship

• Partnership

• LLC

A business owned by two or more people

A merchandising business is one that performs services for customers in order to earn a profit.

• True

• False

The three accounting elements are assets, liabilities, and owner’s equity

• True

• False

The sequence of steps or procedures used by a business to record and summarize accounting data is known as the accounting cycle.

• True

• False

The first step in the accounting cycle is to record transactions in the journal

• True

• False

Name ONE example of a Source Document