What are the differences between GAAP and IFRS? What will be an ideal response? ANSWER The United States follows Generally Accepted Accounting Principles (GAAP). GAAP is rule-based accounting standards established by the Financial Accounting Standards Board (FASB). It sets out the standards, conventions, and rules that accountants must follow when preparing audited financial […]
State X hired Build-Right Construction to build a bridge. State X required that construction be completed within 2 years after the contract was signed. Les Johnson is the president of Build-Right. State X required that Build-Right’s promise to perform be guaranteed by a third party. Build-Right purchased a performance bond from Rock Solid Indemnity. The […]
Which of the following is/are true? A) Two points on the Characteristic Line are the T-bill and the market portfolio. B) Most of the unsystematic risk is removed by the time a portfolio contains 30 stocks. C) The greater the total risk of an asset, the greater the expected return. D) All securities have a […]
It is not unusual for a successful firm to temporarily grow more rapidly than its sustainable growth rate if the firm is in the ________ phase of business. A) swan song B) start-up C) cash cow D) middle ANSWER B
Which type of business ownership has limited liability? A) Sole proprietors B) General partners C) Shareholders of a corporation D) None of the above ANSWER C
Liquid assets are less risky than investment assets. Indicate whether the statement is true or false ANSWER TRUE
XYZ Insurance Company markets a wide range of coverages. One type of coverage provides monetary compensation if a bonded party fails to perform certain acts. This coverage is called A) property insurance. B) liability insurance. C) a fidelity bond. D) a surety bond. ANSWER Answer: D
A cashier at Food World Supermarket accepted a phony $100 bill. Which ISO commercial crime coverage is designed to cover such a loss? A) Forgery or Alteration B) Money Orders and Counterfeit Currency C) Inside the Premises—Theft of Money and Securities D) Inside the Premises—Robbery or Safe Burglary of Other Property ANSWER Answer: […]
Even though many U.S. companies, including General Electric, IBM, Walt Disney, and American Express, have successfully restructured their operations to expand internationally, not many foreign firms have made their mark in the United States. Indicate whether the statement is true or false ANSWER FALSE
During the period 1990 to 2014, the average yield on 3-month U.S. Treasury bills was 3.04%, the average inflation rate was 2.64%, the average yield on 30-year Treasury bonds was 5.49%, and the average return on 30-year Aaa-rated corporate bonds was 6.35%. The real risk-free short-term interest rate is A) 2.13%. B) 2.97%. C) 0.40%. […]
