Accounting is often called the language of business.

Accounting produces financial statements, which report information about a business entity.

The business records of a sole proprietorship should include the proprietor's personal assets.

Decision makers who use accounting information include:

Which of the following entities pays federal income taxes ?

Shareholders of a corporation have unlimited liability for the corporation's debts.

) Owners of an LLC are called partners.

Generally accepted accounting principles, or GAAP, are the rules and procedures established by the Securities and Exchange Commission.

Another name for the continuity assumption is the going-concern assumption.

The International Accounting Standards Board is responsible for establishing International Financial Reporting Standards.

Verifiability means that the information must be capable of being checked for accuracy, completeness, and reliability.

The accounting assumption that states that the business, rather than its owners, is the reporting unit is the going concern assumption.

The stable monetary unit assumption enables accountants to ignore the effect of inflation on the accounting records.

The word "payable" always signifies a liability.

Owners' equity is called stockholders' equity for a corporation.

) Stockholders' equity is the creditor's interest in the assets of the corporation.

The accounting equation shows the relationship among assets, liabilities and net income.

Revenues are cash distributions to the stockholders.

Expenses are decreases in retained earnings that result from operations.

Long-term debt is a liability that is payable beyond one year from the date of the financial statements.

Liabilities are debts payable to outsiders called creditors.

Examples of liabilities are accounts payable and common stock.

The assets of a company must equal the liabilities of the company.

The owners' equity of any business is equal to revenues minus expenses.

Receivables are classified as liabilities.