Business Organization and Accounting: Final Exam Questions

Summary

Sole traders, partnerships and corporations differ in who owns them and who carries the risk. Financial statements show how a company makes money. Students get practice identifying correct statements and answers about business organisations and accounting.

Business organization forms

Sole proprietorships, partnerships and corporations are three forms of business organization. Differences between them include liability, tax treatment and ownership transfer.

Accounting and financial statements

Accounting information has internal users and external users. Financial statements include the income statement, balance sheet, statement of cash flows and retained earnings statement.

Three primary business activities

Businesses have three primary business activities. The cash spent on equipment appears in a specific section of the statement of cash flows.

Financial accounting

Questions check knowledge of financial statements and journal entries. Examples concern cash accounts, control accounts and adjusting journal entries for office supplies.

Key terms

Internal user

Someone within a company who uses accounting information.

External user

Someone outside a company who uses accounting information.

Net income

The amount of money made in a time period.

Statement of cash flows

A financial statement that shows cash spent and received.

Adjusted trial balance

A list of accounts with the totals of debits and credits.

General ledger

A book where all transactions are recorded.

Questions this document helps with

• Which types of business organization have personal liability?
• What are the three main types of business activity?
• What is the difference between an income statement and a balance sheet?

Summary written with AI from the document's text.