O'Reilly logo

The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Answers to Questions

Question 1: D. You can structure the business using any one of three options. A simple partnership would not give you liability protection. If the type of business you are starting puts you at risk of lawsuits, you may want to seek liability protection using a Limited Liability Corporation (LLC) or a corporation. Check with your accountant and attorney to sort out the best structure for your business.
Question 2: C. Inventory is an asset and would be found on the balance sheet, which includes Assets, Liabilities, and Equity. The other three accounts are Income Statement accounts.
Question 3: B. Sales is an income account and would be found on the Income Statement. The other three accounts are balance sheet accounts.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required