Which of the following is a true statement regarding owners’ equity?
a. APB Statement 4 and SFAC No. 6 both reflect the entity view of the firm.
b. Owners’ equity consists of only two components: contributed capital and retained earnings.
c. In a sole proprietorship, there is no legal distinction between contributed capital and earned capital.
d. Dividends are legally paid only out of retained earnings.
ANSWER: C
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Which one of the following is the last step in the accounting cycle?
a. Journalizing business transactions b. Recording and posting adjustments c. Closing the accounts d. Preparing financial statements
Which of the following statements is true regarding the percentage of sales approach to budgeting?
A) It views advertisement as an investment measures its return by calculating percentage increase in sales for a particular period. B) It attempts to spend at levels proportional to the competition's spending. C) Approach is based on the belief that advertising causes sale. D) It selects a percentage of sales, either past or expected to devote to advertising.
Answer the following statements true (T) or false (F)
1. Government regulators are regulatory agencies that establish ground rules under which organizations may operate. 2. To a commercial airline, the Federal Aviation Agency (FAA) is an example of a stakeholder. 3. The National Rifle Association is an example of a government regulator. 4. In business, the extended environment is another name for general environment.
For the return on assets pricing method, the desired rate of return on assets per unit is added to the total costs and expenses per unit to determine the selling price
Indicate whether the statement is true or false