A firm which uses the aggressive financing strategy plans to purchase raw materials in large quantities to take price discounts. The firm will finance the purchase with a long-term loan. The most likely consequence of this action is ________
A) a decrease in the current ratio
B) an increase in net working capital
C) an increase in risk of insolvency
D) a decrease in net working capital
B
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In an actual cost system, factory overhead is assigned to an overhead control account and then allocated to products and services
Indicate whether the statement is true or false
Ronn Industries Ronn Industries reported net income of $95,000 for 2012. Early in 2013, Ronn discovered that its 2012 ending inventory was overstated by $5,000. Refer to the information provided for Ronn Industries. Determine the effects of the inventory errors for 2012
A) Assets and equity would have been overstated by $5,000 on the balance sheet; expenses and net income would have been understated by $5,000 on the income statement. B) Assets and equity would have been overstated by $5,000 on the balance sheet; expenses would have been overstated by $5,000 on the income statement, thus net income would have been understated by $5,000. C) Assets and equity would have been understated by $5,000 on the balance sheet; expenses would have been overstated by $5,000 on the income statement, thus net income would have been understated by $5,000. D) Assets and equity would have been overstated by $5,000 on the balance sheet; expenses would have been understated by $5,000 on the income statement, thus net income would have been overstated by $5,000.
Jackson Medical Supply experienced the following events during June. The company uses the perpetual inventory system.1) Issued common stock for cash.2) Purchased inventory on account, terms 2/10, n/30, FOB shipping point.3) Paid the freight charges on the purchase in event #2.4) Sold merchandise to a customer on account, terms 2/10, n/30, FOB destination. (a) Recognized cash revenue from sale of merchandise.(b) Recognize cost of goods sold.5) Paid the freight charges on goods sold in event #4.6) Customer returned some of the merchandise sold in event #4. (a) Recognized the sales return.(b) Recognize the cost of the goods as a return to the inventory account.7) Recorded discount granted to the customer in event #4.8) Recorded payment received from the customer in event #4.9) Recorded
discount received on purchase in event #2.10) Recorded payment of amount due on purchase in event #2.Required: Complete the financial statements model shown below. Identify each event as asset source (AS), asset use (AU), asset exchange (AX), or claims exchange (CX). Also explain how each event affects the financial statements by placing a "+" for increase, "?" for decrease, "+?" for increase and decrease, or "NA" for not Also, indicate in the cash column if the event would be recorded as an operating activity (OA), an investing activity (IA) or a financing activity (FA). The first event is recorded as an example.
What will be an ideal response?
Congress enacts the Ad Restriction Act (ARA) to limit advertising in certain circumstances. The ARA will be considered valid if it directly advances a substantial government interest
a. and goes no further than necessary to achieve its purpose. b. without regard to how "far" it goes. c. and the parties affected by it can elect how "far" to go in applying it. d. and goes further than necessary to ensure full coverage.