The analysis of a firm's financial statements can be an important factor in the firm's ability to borrow money
Indicate whether this statement is true or false.
Answer: TRUE
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An auditor compares information on canceled checks with information contained in the cash disbursements journal. The objective of this test is to determine that:
A. cash disbursements are for goods and services actually received. B. proper cash purchase discounts have been recorded. C. no discrepancies exist between the data on the checks and the data in the journal. D. recorded cash disbursement transactions are properly authorized.
Which of the following is not true about a stock dividend?
a. With a stock dividend, the firm issues a percentage of outstanding stock as new shares to existing shareholders. b. The overall effect of a stock dividend is to leave total stockholders' equity and each owner's share of stockholders' equity unchanged. c. In theory, with a stock dividend, total market value considering all outstanding shares should not change. d. Since the number of shares changes under a stock dividend, any ratio based on the number of shares must be restated. e. The accounting for a stock dividend, assuming the distribution is relatively small, requires that the par value of the stock be removed from retained earnings.
Answer the following statements true (T) or false (F)
According to the Trueblood Committee Report, current values should be reported when they differ significantly from historical costs.
Judd Enterprises These are the simplified financial statements for Judd Enterprises. Income statementCurrent
Projected Salesna 1,000 Costsna 720 Profit before taxna 280 Taxes (25%)na 70 Net incomena 210 Dividendsna 63 Balance sheetsCurrentProjected CurrentProjectedCurrent assets 100 115 Current liabilities 70 81 Net fixed assets 900 1,080 Long-term debt 400 Common stock 300 Retained earnings 230 ? Refer to the Judd Enterprises financial statements. If Judd does not plan on issuing new stock or additional long-term debt, then what is the additional net financing needed for the projected year? A. $30 B. $33 C. $37 D. $339 E. $396