Which of the following statements regarding cash equivalents is correct?
a. A one-year Treasury note could not qualify as a cash equivalent.
b. All investments meeting the FASB's criteria for cash equivalents must be reported as such.
c. The date a security is purchased determines its "original maturity" for cash equivalent classification purposes.
d. Once established, management's policy for classifying items as cash equivalents cannot be changed.
C
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Discounts from invoice prices, which act as an inducement for prompt payment of invoices, are called cash discounts
Indicate whether the statement is true or false
During the first two years, Supplies, Inc. drove the company truck 15,000 and 22,000 miles, respectively, to deliver merchandise to its customers. The company originally purchased the truck for $175,000. If the truck has an estimated life of 10 years or 300,000 miles, and an estimated residual value of $25,000, what amount of depreciation expense should Supplies, Inc. record in the second year using the activity-based method?
A. $16,000. B. $18,500. C. $7,500. D. $11,000.
The sum of current and noncurrent liabilities is net worth
Indicate whether the statement is true or false
Departmentalization that groups units around products, customers, or geographic regions is a defining characteristic of a ________ organization.
A. functional B. conglomerate C. divisional D. centralized E. virtual