Would a banker be more interested in the liquidity or the profitability of a company? Explain
A banker is more interested in the likelihood that a loan will be repaid. Liquidity and solvency are both analyses that must be assessed. Liquidity indicates the company's ability to pay debt on a current basis, whereas solvency indicates whether the company can pay debt on a longer-term basis.
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What specific internal control procedure would prevent an accounts receivable clerk from issuing a fictitious credit memo to a customer (who is also a relative) for goods that were "supposedly" returned from previous sales?
The adjusting entry to recognize uncollectible accounts expense does not affect the net realizable value of receivables.
Answer the following statement true (T) or false (F)
California caps noneconomic damages in medical malpractice cases at $250,000. California and other states hope that such limits will reduce health-care expenditures by reducing
A. the frequency and severity of medical malpractice claims. B. the frequency and severity of occurrences of medical negligence. C. the number of legal and financial personnel, including attorneys. D. the size of medical staffs, including "nonessential" personnel.
Shareholders react to poor investment or dividend decisions by causing the total value of the firm's
stock to fall, and they react to good decisions by bidding the price of the stock up. Indicate whether the statement is true or false