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1. The proprietorship form of business organization a. must have at least two owners in most states. b. generally receives favorable tax treatment relative to a corporation. c. combines the records of the business with the personal records of the owner d. is classified as a separate legal entity. 2. A business organized as a corporation is not a separate legal entity in most states. a. b. requires that stockholders be personally liable for the debts of the business. is owned by its stockholders. d. c. has tax advanta ges over a proprietorship or partnership 3. Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX)? a. The Act calls for increased oversight responsibilities for boards of directors. b. The Act has resulted in increased penalties for financial fraud by top management. c. The Act calls for decreased independence of outside auditors reviewing corporate financial d. The Act is meant to decrease the likelihood of unethical corporate behavior. 4. Which of the following groups uses accounting information primarily to insure the entity is operating within prescribed rules? a. Taxing authorities b. Regulatory agencies c. Labor Unions d. Management 5. The right to receive money in the future is called a(n) a account payable b. account receivable. d. revenue 6. Issuing shares of stock in exchange for cash is an example of a(n) a. delivering activity b. investing activity. c. financing activity d. operating activity. 7. Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries. Paid $60,000 to purchase office equipment. Paid $15,000 for utilities. Paid $6,000 in dividends. Collected $245,000 from customers. What was Jackson's net cash provided by operating activities? a. $95,000 b. $35,000 c. $110,000 d. $89,000

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