How should a company view advertising in terms of economic conditions, such as a recession?
What will be an ideal response?
While advertising is a current expense for accounting purposes, it is also a long-term investment. For management to treat advertising as an investment, however, it must understand how advertising relates to sales and profits. Advertising builds consumer preference and promotes goodwill. This, in turn, enhances the reputation and value of the company name and brand. And it encourages customers to make repeat purchases. Like all expenditures, advertising should be evaluated for wastefulness. But historically, companies that make advertising the scapegoat during tough times end up losing substantial market share before the economy starts growing again.
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Which of the following statements about classification choices is correct?
A. GAAP classifies interest received as either an operating or investing activity, but IFRS requires it to be classified as an investing activity. B. GAAP allows interest paid to be classified as either an operating or financing activity, but IFRS requires that it be classified as a financing activity. C. GAAP classifies cash dividends paid as a financing activity, but IFRS allows them to be classified as either an operating or financing activity. D. GAAP classifies cash dividends received as an investing activity, but IFRS allows them to be classified as either an operating or investing activity.
Give an example from the chapter of a company/organization that benefited from "management walking around."
What will be an ideal response?
The Balanced Scorecard was originally proposed in 1996 by:
a. Guest and White (1996) b. Kaplan and Norton (1996) c. Guest (2000) d. Jamrog (2004)
The cost of debt measures the cost of a bank loan, while the cost of preferred stock is used as a
proxy for the cost of a new bond issue. Indicate whether the statement is true or false