Indicate Whether Each of the Following Statements Is True or False

question 152

Short Answer

Indicate whether each of the following statements is true or false.
_____ a) Double taxation refers to the fact that both a partnership and its partners must pay income tax on the earnings of the partnership.
_____ b) A sole proprietorship is an accounting entity separate from its owner.
_____ c) Limited liability is a benefit to both corporations and partnerships, but not to sole proprietorships.
_____ d) Unlike a partnership, a corporation is not terminated when a major stockholder withdraws his or her investment.
_____ e) Corporations are, generally, subject to fewer governmental regulations than sole proprietorships.

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Definitions:

Cost Reconciliation

Cost reconciliation is the process of analyzing and adjusting the differences between the actual costs incurred and the standard or budgeted costs to understand variances in manufacturing or production activities.

Process Costing

Process costing is a method of costing used by companies that produce similar or homogenous products, where costs are accumulated over a period and then allocated to units of product.

Weighted-Average Method

An inventory costing method that assigns an average cost to each unit of inventory, calculated by dividing the total cost of goods available for sale by the total units available.

Conversion Cost

Sum of direct labor and manufacturing overhead costs, representing the costs necessary to convert raw materials into finished goods.