The ____ measures the percentage change in profits resulting from a percentage change in sales
A) variable cost ratio
B) contribution margin ratio
C) degree of operating leverage
D) sales margin ratio
E) break-even ratio
C
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One area of difference between GAAP and IFRS cash flow reporting is the
A) treatment of losses on sale of equipment. B) general categories required for various types of cash flows. C) use of the direct or indirect method of reporting operating cash flows. D) allowed classifications of dividends and interest paid or received.
Regarding employee stock options, which of the following is/are true?
a. Firms compute a fair-value-based measure of employee stock options on the date of the grant using an option-pricing model that incorporates information about the current market price, the exercise price, the expected time between grant and exercise, the expected volatility of the stock, the expected dividends, and the risk-free interest rate. b. Total compensation cost is the number of options the firm expects to vest times the expected value per option at the date of redemption. c. Firms amortize this total cost over the requisite service period, which is the expected period of benefit. d. The requisite service period is usually the period between the grant date and the vesting date. e. Firms do not typically remeasure most types of stock options after the initial grant date.
The Jack Company began its operations on January 1, 2016, and used the LIFO method of accounting for its inventory. On January 1, 2018, Jack Company adopted FIFO in accounting for its inventory. The following information is available regarding cost of goods sold for each method: ? LIFO Cost of FIFO Cost of Year Goods Sold Goods Sold 2016 $470,000 $350,000 2017 690,000 450,000 2018 700,000 540,000 Assuming a tax rate of 35% and the same accounting change adopted for tax purposes, how would the effect of the accounting change be reported in opening retained earnings on the 2018 financial statements?
A. +$360,000 restatement B. +$234,000 restatement C. -$700,000 restatement D. no restatement
Warranty liability may be imposed on both nonsigners and signers of an instrument
Indicate whether the statement is true or false