Match the term with its definition.
A. A line of credit secured by working capital assets
B. 1/100th of 1 percent when quoting an interest rate
C. An installment loan from a seller of machinery used by a business
D.
E. An informal agreement between a borrower and a bank as to the maximum amount of funds the bank will provide at any one time
F. The interest rate charged by commercial banks on loans to their most creditworthy customers
G. Obtaining cash from a lender who, for a fee, advances the amount of the borrower's cost of goods sold for a specific customer order
H. Money loaned for a 5- to 10-year term, corresponding to the length of time the investment will bring in profits
A. asset-based loan
B. basis point
C. equipment loan
D. LIBOR (London InterBank Offered Rate)
E. line of credit
F. prime rate (base rate)
G. purchase-order financing
H. term loan
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Partners Ken and Macki each have a $40,000 capital balance and share income and losses in a ratio of 3:2 . Cash equals $20,000, noncash assets equal $120,000, and liabilities equal $60,000 . If the noncash assets are sold for $80,000, the Macki's capital account will
a. decrease by $16,000 b. decrease by $24,000 c. increase by $24,000 d. decrease by $40,000
Answer the following statements true (T) or false (F)
1. As top level managers get older they are less likely to take risks and are not as concerned about short term gratification. 2. As the level of experience of the top level managers increase, the likelihood of the top level managers commit fraud also increases. 3. Under the cookie jar system, management will build up financial reserves in profitable years and release the financial reserves into the financial statements during unprofitable years. 4. Off-balance sheet financing creates separate legal entities from the parent company. 5. Earnings management is the purposeful intervention in the process of reporting income numbers with the objective of dampening the fluctuations of those numbers around their trend.
Under the Sarbanes-Oxley Act, discriminating against or discharging an informant is:
a. punishable by a fine only. b. punishable by a substantial fine or imprisonment for as long as ten years, but not both. c. punishable by a substantial fine or imprisonment for as long as ten years, or both. d. not addressed.
Van Beeber Corporation's comparative balance sheet and income statement for last year appear below:Comparative Balance Sheet???Ending BalanceBeginning BalanceCash and cash equivalents$58,000$34,000Accounts receivable48,00036,000Inventory56,00067,000Prepaid expenses24,00016,000Long-term investments280,000220,000Property, plant, and equipment580,000580,000Less accumulated depreciation 270,000 235,000Total assets 776,000 718,000???Accounts payable$32,000$53,000Accrued liabilities38,00021,000Income taxes payable61,00031,000Bonds payable90,00060,000Common stock80,00060,000Retained earnings 475,000 433,000Total liabilities and stockholders' equity 776,000 718,000Income Statement?Sales$700,000Cost of goods sold 360,000Gross
margin 340,000Selling and administrative expense 210,000Net operating income130,000Income taxes 39,000Net income $91,000The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by (used in) operating activities.On the statement of cash flows, the income tax expense adjusted to a cash basis would be: A. $25,000 B. $69,000 C. $9,000 D. $39,000