John has to pay $1,000 per month for his mortgage for another 5 years, but he is considering paying the mortgage off in one lump sum. John cannot calculate the present value of the payments using the annuity formulas because his payments are monthly and not once per year. Indicate whether the statement is true […]
Date: September 19th, 2020
Ensuring that there is adequate cash to pay the firm’s suppliers is an example of which cash-related activity in the cash flow cycle? A) Operating activity B) Profitability activity C) Investing activity D) Financing activity ANSWER A
Date: September 19th, 2020
Pro forma income statements are primarily based on forecasted sales and assumed relationships related to sales. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
All of the following statements about balance sheets are true EXCEPT A) Assets – Liabilities = Shareholders’ Equity. B) balance sheets show average asset balances over a one-year period. C) a balance sheet reports a company’s financial position at a specific point in time. D) assets are reported at historical cost. ANSWER B
Date: September 19th, 2020
What information does a firm’s balance sheet provide to the viewing public? A) a complete listing of all of a firm’s cash receipts and cash expenditures for a defined period of time B) an itemization of all of a firm’s assets, liabilities, and equity as of the balance sheet date C) a report of investments […]
Date: September 19th, 2020
The concurrent causation exclusion in the Homeowners 3 policy specifies that: A) if two or more perils jointly cause a loss, there is no coverage if one of the perils is excluded. B) if the insured has two or more policies in force at the time of the loss, the loss is not covered. C) […]
Date: September 19th, 2020
Which of the following statements about the insurer’s obligation to provide a legal defense under the personal liability coverage (Coverage E) of the homeowners policy is (are) true? I. The insurer agrees to defend the insured only if the suit is not groundless, false, or fraudulent. II. The insurer’s obligation to defend the insured ceases […]
Date: September 19th, 2020
The provisions of the Sarbanes-Oxley Act of 2002, or SOX, apply to all U.S.-based corporations, as well as to foreign corporations conducting business in U.S. markets. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
When comparing inventory turnover ratios, other things being equal, A) higher inventory turnover results from old or obsolete inventory increasing the inventory balance on the balance sheet. B) a higher inventory turnover is preferred to improve liquidity. C) higher inventory turnover results from an increase in the selling price of the product. D) a lower […]
Date: September 19th, 2020
Following catastrophic hurricane losses, South Coast Insurance Company changed its deductible provision. Rather than using a specified dollar value, $250 for example; the dollar value of the deductible increases with the size of the loss. The type of deductible that South Coast changed to is called a(n) A) calendar-year deductible. B) aggregate deductible. C) straight […]
Date: September 19th, 2020
