Which of the following is not a characteristic of money market funds (MMFs)?
A) They pool money provided by individuals to invest.
B) They invest in securities with short-term maturities.
C) They are high-risk investments.
D) They allow limited check writing.
Answer: C
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Which of the following adjusting entries involves the recognition of an accrued expense?
A) recording depreciation on a long-lived asset B) writing off the portion of an insurance policy that has expired C) recognition of salaries owed to employees for work done during the current period that will be paid during the next accounting period D) recognition of bad debt losses that are expected to result from making sales on credit terms
Ralph and Aisha engaged Emma, a realtor, to sell their variety store. Emma represented to buyer Pavel that "this was a typical general store," selling gas, oil, hardware, beer, and groceries. She reported that the store had an annual gross income of over $1 million. Emma failed to inform Pavel that one-third of the store's profit was attributable to an accompanying lawn and garden equipment distributorship that Ralph and Aisha were not including in the sale. When Pavel visited the business, Emma directed him away from the garage area where the lawn and garden equipment was stored. Throughout all of these negotiations, Ralph and Aisha were unaware of Emma's misrepresentations. After purchasing the store, Pavel learned of the importance of the equipment sales from Ralph and Aisha. Are Ralph
and Aisha liable for Emma's misrepresentation? What will be an ideal response?
What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $8450 before adjustment, and the unexpired amount per analysis of policies is $3600?
A. Debit Cash, $8450; Credit Prepaid Insurance, $8450. B. Debit Prepaid Insurance, $4850; credit Insurance Expense, $4850. C. Debit Insurance Expense, $4850; credit Prepaid Insurance, $4850. D. Debit Insurance Expense, $3600; credit Prepaid Insurance, $3600. E. Debit Insurance Expense, $8450; credit Prepaid Insurance, $8450.
A company has earnings per share of $9.60. Its dividend per share is $0.50, its market price per share is $110, and its book value per share is $96. Its price-earnings ratio equals:
A. 1.15. B. 11.46. C. 19.2. D. 0.87. E. 10.0.