principles of acctg hw 3 495355

Student Name_____________________________ Student ID#__________________ Accounting is the information system that measures business activity, processes the data into reports, and communicates the results to decision makers. Accounting is “the language of business.” 3) A debt that a business owes to an outside party is called: A) an asset. B) a liability. C) stockholders’ equity. D) revenue. 4) There are relatively few types of revenue. Which of the following in NOT a type of revenue? A) Common Stock B) Service C) Interest D) Sales 5) A promise received from a business’s customers to pay for goods and services that they received from the business is called a(n): A) account receivable. B) account payable. C) revenue. D) expense. 6) Managerial accounting focuses on information for decision makers outside of the business, such as creditors and taxing authorities. 7) Business owners use accounting information to set goals, evaluate progress toward those goals, and take corrective action when needed. 8) Outside investors would ordinarily use financial accounting information to decide whether or not to invest in a business. 9) An investor is someone who loans money to a business. 10) A creditor is a party that has an ownership interest in a business. 11) The AICPA’s Code of Professional Conduct for Accountants provides guidance to CPAs in the performance of their work. 12) A proprietor has unlimited liability for the debts and obligations of the proprietorship. 13) The most that a proprietor can lose, as a result of business debts or lawsuits, is limited to the amount he/she has invested 14) A proprietor may have to pay self-employment tax in addition to income tax. 15) In an LLC, the business, not the owners, is responsible for the corporation’s debts. 16) A proprietorship is created by: A) electing a board of directors. B) obtaining a state charter. C) issuing shares of stock. D) one individual deciding to start a business. 17) An account is the…