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In: Business and Management

Submitted By xsshirley
Words 1423
Pages 6
1. Question :
(TCO A) A corporation has which of the following advantages?

Student Answer: Reduced taxes Simple to set up CORRECT Limited liability for stockholders Owner maintains control Instructor Explanation: Chapter 1 Points Received: 5 of 5 Comments:

Question 2. Question :
(TCO A) Preferred stock _____.

Student Answer: provides voting rights is an asset account is very common CORRECT provides preferred shareholders with a priority claim on assets versus common stockholders Instructor Explanation: Chapter 10 Points Received: 5 of 5 Comments:

Question 3. Question :
(TCOs A, B) Below is a partial list of account balances for LBJ Company:



Prepaid insurance


Accounts receivable


Accounts payable


Notes payable


Common stock








What did LBJ Company show as total credits?

Student Answer: INCORRECT $185,500 $250,500 $66,000 CORRECT $184,000 Instructor Explanation: Chapter 2 and Chapter 3 Points Received: 0 of 5 Comments:

Question 4. Question :
(TCOs B, E) Which of the following statements is correct with regard to cash-basis accounting?

Student Answer: Cash-basis accounting is required by GAAP. CORRECT Cash-basis accounting does not record any expenses until they are paid. Cash-basis is never allowed by the IRS. Cash-basis accounting records revenue when the product is shipped. Instructor Explanation: Chapter 3 Points Received: 5 of 5 Comments:

Question 5. Question :
(TCO D) Which inventory method will result in the lowest income taxes when prices are decreasing?

Student Answer: The average cost method LIFO CORRECT FIFO…...

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