Fall 2020 Accounting 1 Mid-Term

To survive, a business must______

• Make a product consumers want and report profiles to the IRS

• Earn a profit and have someone willing to take the risk to run it

• Earn a profit and have someone willing to take the risk to run it

• Have adequate start-up capital and prepare periodic reports

A business is earning a profit if the selling price of its product covers the cost of the raw materials needed to make the product

• True

• False

Accounting is often called the "language of business" because_____

• It is easy to understand

• It is fundamental to the communication of financial information

• All business owners have a good understanding of accounting principles

• Accountants in many companies share financial information

Only businesses that earn a profit will have the economic resources to continue to operate

• True

• False

Which of the following would not be considered a service business

• General Motors

• North American Van Lines

• Delta Air Lines

• Alamo Rent a Car

In a business, it is the entrepreneur who_____

• Provides the labor needed to operate a business

• Is willing to take the risks to establish and organize the venture

• Supplies the capital needed to establish the business

• Manages the financial aspect of the business

The most common time period covered by an accounting report is one _____

• Quarter

• Year

• Month

• Week

Corporations often start out as sole proprietorships or partnerships

• True

• False

All businesses set up their accounting systems in the same manner

• True

• False

Service businesses are not intended to operate as a profit

• True

• False