Answer the following statements true (T) or false (F)
1. An “exit” or “cash-out” only occurs where there is an IPO.
2. IPOs are the most frequent type of cash-out.
3. Liquidation is considered an exit for investors.
1.False – An exit or cash-out occurs once a company (or part of it) is acquired or its stock is traded on a public exchange.
2.False – It represents only a fraction of the cash-outs made by investors and entrepreneurs.
3.True – While not what investors expect, it is considered an exit.
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Research in psychology indicates that when people commit a crime (especially for the first time), they are initially overwhelmed by ____ and ____
a. guilt, fear b. anxiety, insomnia c. confidence, rationalization d. defensiveness, anger
On October 1, 2018, Mobile Company purchased a patent for $100,000 cash. Although the patent gives legal protection for 20 years, it is expected to be used for only eight years. The patent has no residual value. Journalize the amortization expense for 2018. Assume straight-line amortization. Omit explanation.
What will be an ideal response?
If a company uses LIFO for tax purposes, it need not use LIFO for financial reporting purposes
Indicate whether the statement is true or false
An after-the-fact flexible budget
A) is a budget for the actual level of activity B) is used for performance reports C) calculates what costs should have been for the actual level of activity D) is used to compare expected costs with actual costs E) all of these