Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Measurement Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-07 Explain how the statement of financial position (balance sheet); income statement; and statement of cash flows relate to each other. Topic: Relationships among Financial Statements 25. Limited liability means that owners of a business are only liable for the debts of the business up to the amounts they can afford. FALSE AACSB: Reflective Thinking AICPA BB: Legal AICPA FN: Measurement Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-08 Explain common forms of business ownership-sole proprietorship; partnership; and corporation-and demonstrate how they differ in terms of their statements of financial position. Topic: Forms of Business Organization 26. In a business organized as a corporation, it is not necessary to list the equity of each stockholder on the balance sheet. TRUE AACSB: Reflective Thinking AICPA BB: Legal AICPA FN: Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-08 Explain common forms of business ownership-sole proprietorship; partnership; and corporation-and demonstrate how they differ in terms of their statements of financial position. Topic: Forms of Business Organization 27. The owner of a sole proprietorship is personally liable for the debts of the business, whereas the stockholders of a corporation are not personally liable for the debts of the business. TRUE AACSB: Reflective Thinking AICPA BB: Legal AICPA FN: Measurement Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-08 Explain common forms of business ownership-sole proprietorship; partnership; and corporation-and demonstrate how they differ in terms of their statements of financial position. Topic: Forms of Business Organization
Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Measurement Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-07 Explain how the statement of financial position (balance sheet); income statement; and statement of cash flows relate to each other. Topic: Relationships among Financial Statements 25. Limited liability means that owners of a business are only liable for the debts of the business up to the amounts they can afford. FALSE AACSB: Reflective Thinking AICPA BB: Legal AICPA FN: Measurement Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-08 Explain common forms of business ownership-sole proprietorship; partnership; and corporation-and demonstrate how they differ in terms of their statements of financial position. Topic: Forms of Business Organization 26. In a business organized as a corporation, it is not necessary to list the equity of each stockholder on the balance sheet. TRUE AACSB: Reflective Thinking AICPA BB: Legal AICPA FN: Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-08 Explain common forms of business ownership-sole proprietorship; partnership; and corporation-and demonstrate how they differ in terms of their statements of financial position. Topic: Forms of Business Organization 27. The owner of a sole proprietorship is personally liable for the debts of the business, whereas the stockholders of a corporation are not personally liable for the debts of the business. TRUE AACSB: Reflective Thinking AICPA BB: Legal AICPA FN: Measurement Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-08 Explain common forms of business ownership-sole proprietorship; partnership; and corporation-and demonstrate how they differ in terms of their statements of financial position. Topic: Forms of Business Organization