The maturity matching, or "self-liquidating," approach to financing involves obtaining the funds for permanent current assets with a combination of long-term capital and short-term capital that varies depending on the level of interest rates. When short-term rates are relatively high, short-term assets will be financed with long-term debt to reduce costs.
Answer the following statement true (T) or false (F)
False
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Which types of questions should be asked about a company's relationship with financial institutions?
a. Is a significant part of the company's income or revenues derived from one or two large transactions? b. Has management placed unreasonable demands on the auditor, including unreasonable time constraints? c. Has significant "short selling" of the company's stock occurred? If so, for what reasons? d. Is the organization highly leveraged through bank or other loans?
Mary is planning to form a corporation to manufacture and distribute electric solar panels. She
will sell the panels only in the Rocky Mountain states. These panels will be manufactured at two factories, one in Illinois and one in Florida. The headquarters of this company will be in Louisiana. In which state(s) could Mary incorporate this business? A) Louisiana or any state in which the products are sold B) Florida, Illinois, or Louisiana C) Any of the fifty states D) Florida, Illinois, Louisiana, or any state in which the products are sold E) Louisiana only
If a sale is made with a bank credit card, the seller debits Cash and credits Sales for the same amount.
Answer the following statement true (T) or false (F)
An income statement for Sam's Bookstore for the first quarter of the year is presented below:Sam's BookstoreIncome StatementFor Quarter Ended March 31Sales $900,000Cost of goods sold 630,000Gross margin 270,000Selling and administrative expenses Selling$100,000 Administration 104,000 204,000Net operating income $66,000On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed.The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
A. Y = $78,000 + $9X B. Y = $102,000 + $7X C. Y = $78,000 + $7X D. Y = $102,000 + $5X