The Financial Accounting Standards Board (FASB) has recently voted to eliminate (i) accounting for mergers, and henceforth will allow only the (ii). (i) (ii) a. purchase method pool of interest b. amalgamation consolidation c. pooling of interest purchase method d. consolidation amalgamation ANSWER C
Date: September 19th, 2020
The basic strategies that should be employed by a business firm in managing cash includes ________. A) paying accounts payable as early as possible B) turning over inventory as quickly as possible, avoiding stockouts C) operating in a fashion that requires maximum cash D) extending the credit period allowed to customers ANSWER B
Date: September 19th, 2020
For minimizing the cash conversion cycle, a firm should ________. A) grant longer credit terms to customers to maintain healthy business relations B) pay off accounts payables as fast as possible to gain credibility C) turn over inventory as quickly as possible without stockouts D) increase mail managing, processing, and clearing time when collecting from […]
Date: September 19th, 2020
obtains if a merger results in improvements in any business function, including: (i) management; (vii) labor costs; (ii) production or distribution; etc. a. Operating synergy b. Financial synergy c. Business synchronization d. Economies of scope ANSWER A
Date: September 19th, 2020
obtains in a merger if some aspect of the financial configuration of the merged firm causes its market value to be greater than the sum of the market values of the separate firms. a. Operating synergy b. Financial synergy c. Business synchronization d. Economies of scope ANSWER B
Date: September 19th, 2020
In theory, the conservative financing strategy ignores ________. A) all current liabilities B) the spontaneous forms of short-term financing C) all current assets D) the high risk associated with external financing ANSWER B
Date: September 19th, 2020
Only a firm’s permanent financing requirement (and not the seasonal requirement) is financed with ________ in the aggressive funding strategy. A) long-term debt B) T-bills C) retained earnings D) accounts payable ANSWER A
Date: September 19th, 2020
In economic conditions characterized by a scarcity of short-term funds, a firm would best choose the ________ financing strategy. A) aggressive B) conservative C) permanent D) seasonal ANSWER B
Date: September 19th, 2020
The original creditors of both firms in a merger would benefit from the overall decrease in the probability of bankruptcy that attends the merger, which in turn results from the associated with creditors now having a claim against a larger combined firm. a. tax reduction b. increased interest payments c. decreased principle d. co-insurance […]
Date: September 19th, 2020
A risk of the ________ financing strategy is unpredictable interest expense. A) aggressive B) conservative C) permanent D) seasonal ANSWER A
Date: September 19th, 2020
