In the context of social responsibility, which of the following statements is true of benefit corporations?
A. They do not have profits as their first priority.
B. They receive special tax treatment.
C. They do not undergo comprehensive annual audits.
D. They include only small-scale businesses.
Answer: A
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Assuming revenues are received in cash and expenses, except for depreciation, are paid in cash, net cash flows for a period are equal to
a. net income minus depreciation expense. b. net income. c. net income plus depreciation expense. d. net income plus income tax expense.
At the end of last year, Ace Company had total assets in the amount of $6,000,000 and total liabilities in the amount of $4,000,000. The company issued shares to new stockholders at the beginning of the current year for $1,000,000. As a direct result of this transaction, the:
A. debt-to-assets ratio will decrease. B. debt-to-assets ratio will increase. C. net profit margin ratio will decrease. D. net profit margin ratio will increase.
The Restatement (Second) of Torts Approach:
A. Expands an accountant's legal liability to third parties identified by the client as intended recipients of work B. Limits an accountant's legal liability to only those parties with which it has a privity relationship C. Limits an accountant's legal liability to only those parties that have been named by the client D. Expands an accountant's legal liability to all possible users of the audited financial statements
Answer the following statements true (T) or false (F)
1. When an investor company owns more than 25% of the voting stock of an investee company, it has a controlling influence. 2. The equity method with consolidation is used to account for long-term investments in equity securities with controlling influence. 3. When the cost of a short-term held-to-maturity debt security is different from the maturity value, the difference is amortized over the remaining life of the security. 4. Investments in trading securities are accounted for using the equity method with consolidation. 5. Comprehensive income refers to all changes in equity during a period except those from owners' investments and dividends.