What is a primary drawback with examining and comparing absolute amounts from two businesses' financial statements?
What will be an ideal response?
Answers will vary
The primary drawback is that absolute amounts are affected by the size of a company. A change in absolute amount that would be important for one company might be immaterial (too small to matter) for another company.
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If Rex Corporation issued ten $1,000 bonds issued at 99.75 on the interest date, the entry to record this transaction is :
A) Cash 990.75 Bonds Payable 990.75 B) Cash 9,907.50 Bonds Payable 9,907.50 C) Cash 997.50 Bonds Payable 997.50 D) Cash 9,975 Unamortized bondDiscount 25Bonds Payable 10,000
Murton Industries Murton Industries, Inc reported the following information on its recent balance sheet. Common stock, $10 par, 100,000 shares authorized, 75,000 shares issued and outstanding Refer to the information for Murton Industries. What is the effect on Murton's accounting equation of issuing 1,000 additional shares of common stock at $15 per share?
A) Assets increase $15,000, liabilities increase $5,000, and equity increases $10,000 B) Assets increase $15,000, liabilities remain unaffected, and equity increases $15,000 C) Assets decrease $10,000, liabilities remain unaffected, and equity increases $10,000 D) Assets decrease $15,000, liabilities decrease $5,000, and equity decrease $10,000
Depreciation must be considered when evaluating the incremental operating cash flows associated with a capital budgeting project because:?
A. ?it represents a tax-deductible cash expense. B. ?the firm has a cash outflow equal to the depreciation expense each year. C. ?depreciation has an impact on the taxes paid by the firm, which is a cash flow. D. ?depreciation is a sunk cost. E. ?depreciation is a cash flow that doesn't change.
The very essence of a gift is transferring ownership in something to someone else without expecting anything in return
Indicate whether the statement is true or false