In an accrual accounting system,
a. all accounts have normal debit balances.
b. a debit entry is recorded on the left-hand side of an account.
c. liabilities, owner's capital, and dividends all have normal credit balances.
d. revenues are recorded only when cash is received.
B
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If a company understates its ending inventory balance for 2016 by $15,500, what are the effects on its net income for 2017 and 2016? Effect on 2017 Net Income Effect on 2016 Net Income
a. Overstated by $15,500 Understated by $15,500 b. Understated by $15,500 Overstated by $15,500 c. Understated by $15,500 No effect d. Overstated by $15,500 No effect
The purpose of depreciation is to allocate the asset's cost systematically and rationally over the life of the asset to ensure that the company has adequate capital for future replacement
Indicate whether the statement is true or false
Which of the following statements is CORRECT?
A. The preemptive right gives stockholders the right to approve or disapprove of a merger between their company and some other company. B. The preemptive right is a provision in the corporate charter that gives common stockholders the right to purchase (on a pro rata basis) new issues of the firm's common stock. C. The free cash flow valuation model, Vops =FCF1/(WACC ? g), cannot be used for firms that have negative growth rates. D. The free cash flow valuation model, Vops = FCF1/(WACC ? g), can be used only for firms whose growth rates exceed their WACC. E. If a company has two classes of common stock, Class A and Class B, the stocks may pay different dividends, but under all state charters the two classes must have the same voting rights.
Many companies offer ethics training to employees and have codes of ethics that help guide buyers and sellers in business
Indicate whether the statement is true or false a. True b. False