How is net income calculated in an income statement??
A. ?Net income = Net operating income + Interest
B. ?Net income = Gross profit - Retained earnings
C. ?Net income = Net sales - Variable operating costs
D. ?Net income = Earnings before taxes - Taxes
E. ?Net income = Net cash flow + Depreciation?
Answer: D
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An accountant is required to comply with the provisions of Statements on Standards for Accounting and Review Services when:I.Typing client-prepared financial statements, without modification, as an accommodation to a client.II.Preparing standard monthly journal entries for depreciation and expiration of prepaid expenses.
A. I only. B. II only. C. Both I and II. D. Neither I nor II.
Quarterly planning cycles are recommended for companies that are operating in ________
A) dynamic markets B) static markets C) declining markets D) well-established markets
Jerry Brown was camping on a lake. He met an old man, Edgar Kettle, who owned two acres of land fronting on the lake. Mr. Brown knows that the value of the lakefront property in this area is around $30,000 an acre
He offers Kettles $18,000 for his land. Kettle says, "No, Mr. Prime Minister, I can't accept that. I'll take $12,000." Brown knows it is a great deal. He comes back that day with a contract of sale and Mr. Kettle signs. In fact, Mr. Kettle suffers from senile dementia. As soon as Mr. Kettle's children find out about the deal, they attempt to cancel it. Will they succeed? A) No. No one told Brown that Kettle was suffering from a mental illness. B) Yes. It should have been apparent to Brown that Kettle was mentally incompetent. C) No. It was a bad deal for Kettle but the courts don't protect parties from their own stupidity. D) No. Only Mr. Kettle himself can cancel the contract. E) No. Kettle was of sound mind, not mentally incompetent.
Tony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds will pay $45 interest every 6 months. Current market conditions are such that the bonds will be sold at net $937.79. What is the yield to maturity (YTM) of the issue as a broker would quote it to an investor?
A. 11% B. 10% C. 9% D. 8% E. 7%