81. Which of the following is true in regards to a Limited Liability Company?
A. LLCs make up about 10% of business organizations in the United States.
B. LLCs can be used as alternatives to partnerships.
C. LLCs provide tax and liability advantages to the owners.
D. All are correct.
82. Stockholders in a corporation have an interest in the company because
A. they provide incentives for the company to market their products.
B. they are part of the Marketing Department that is responsible for promoting the products or services to increase the business profits.
C. they help market their products to customers or find vendors to supply needed inputs.
D. they provide major financing for the business.
83. Which of the following groups are considered to be internal usersof accounting information?
A. Employees and customers
B. Customers and vendors
C. Employees and managers
D. Government and banks
84. The following are examples of external users of accounting information except:
A. government
B. customers
C. creditors
D. all of the above
85. Due to various fraudulent business practices and accounting coverups in the early 2000’s, Congress enacted the Sarbanes-Oxley Act of 2002. The Act was responsible for establishing a new oversight board for public accountants called the
A. Generally Accepted Accounting Practices for Public Accountants Board.
B. Public Company Accounting Oversight Board.
C. Congressional Accounting Oversight Board.
D. None are correct.
86. Which of the following is the best description of accounting’s role in business?
A. Accounting provides stockholders with information regarding the market value of the company’s stocks.
B. Accounting provides information to managers to operate the business and to other users to make decisions regarding the economic condition of the company.
C. Accounting provides creditors and banks with information regarding the credit risk rating of the company.
D. Accounting is not responsible for providing any form of information to users. That is the role of the Information Systems Department.
87. Managerial accountants would be responsible for providing the following information:
A. Tax reports to government agencies.
B. Profit reports to stockholders and management.
C. Expansion of a product line report to management.
D. Consumer reports to customers.
88. Which of the following is not a certification for accountants?
A. CIA
B. CMA
C. CISA
D. All are true.
89. Which of the following isnot a characteristic of a corporation?
A. Corporations are organized as a separate legal taxable entity.
B. Ownership is divided into shares of stock.
C. Corporations experience an ease in obtaining large amounts of resources by issuing stock.
D. A corporation’s resources are limited to their individual stockholders’ resources.
90. Which of the following is not a role of accounting in business?
A. To provide reports to users about the economic activities and conditions of a business.
B. To personally guarantee loans of the business.
C. To provide information to other users to determine the economic performance and condition of the business.
D. To assess the various informational needs of users and design its accounting system to meet those needs.