Answer the following statement(s) true (T) or false (F)
1. One of the advantages of Nash’s 12 questions is that it ignores implementation.
2. Choosing not to act is acting.
3. One of the cons of the Lonergan/Baird method is that it is not widely used.
4. According to the Foursquare Protocol Element 1, you need to dig into the facts.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
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Pro Forma Financial Information What is the difference between historical financial information and pro forma financial information? Discuss the guidelines that should be adhered to when presenting pro forma financial information
Which of the following is not a proper use of notes?
a. To describe the nature and effect of a change in accounting principle, such as from FIFO to LIFO. b. To indicate the basis for asset valuation. c. To indicate the method of depreciation. d. To correct an improper financial statement presentation. e. To describe a firm's debt.
Answer the following statements true (T) or false (F)
1. Declaring and paying dividends causes an increase in both assets and stockholders' equity of the corporation. 2. Legal capital refers to the portion of stockholders' equity that cannot be used for dividends. 3. If preferred stock is noncumulative, the company is required to pay dividends that were passed in previous years. 4. The declaration date is the date the corporation prepares a journal entry to record that stockholders will receive dividend checks. 5. No journal entry is made on the dividend declaration date.
Nancy owned business equipment with a $16,950 adjusted basis and a $7,500 FMV that was destroyed by a tornado. The equipment was uninsured. As a result of this casualty, Nancy:
A. Recognizes a $7,500 Section 1231 loss B. Is allowed to deduct a $7,500 ordinary loss C. Is allowed to deduct a $16,950 ordinary loss D. Recognizes a $16,950 Section 1231 loss