Seller receives a letter of credit from a foreign buyer covering "1,000 standard-sized bed pillows." Seller's export manager completes an invoice for "1,000 bed pillows, size 20 by 26 inches" (this is the internationally accepted standard size for pillows). Which of the following is false?
A) If the issuing bank accepts or pays against documents, it will be liable to the account party.
B) The issuing bank must accept or pay against documents because 20 by 26 is standard and the goods conform to the contract.
C) The issuing bank may refuse to accept or to pay the draft upon presentation of the invoice.
D) If the buyer waives the defect in the invoice, the bank must accept or pay the draft.
B
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The ability to cope and recover more quickly from disappointments demonstrates which of the following?
A. stamina B. resilience C. social intelligence D. interpersonal intelligence
A business generates a net profit of $124 million and its return on capital is 12.5%. Calculate the total capital invested into the business
A) $992 million B) $860 million C) $740 million D) $668 million E) $532 million
A contingency must be accrued in the accounts and reported in the financial statements when
a. the amount of the loss can be reliably estimated and it is probable that an asset is impaired or a liability incurred. b. it is evident that an asset has been impaired or a liability has been incurred even though the amount of the loss cannot be reliably estimated. c. it is not certain that funds will be available to settle damages that may arise from a pending lawsuit. d. a loss is expected and its amount is uncertain.
Which of the following is a true statement regarding an exit-price accounting system?
a. It measures flexibility of the firm in terms of the amount of cash that would be realized from a forced liquidation of assets. b. It provides an excellent indicator of liquidity. c. It provides an estimate of the speed of conversion of a firm’s resources. d. It provides an estimate of the cash conversion value of a firm’s resources.