A compensating balance includes all of the following characteristics except:
a. a portion of the loan proceeds is required to be retained on deposit.
b. must be at amortized cost.
c. increases effective interest rate.
d. if held against a current liability, it is disclosed as part of current assets.
b
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Solvency analysis focuses on the ability of a business to pay its current and noncurrent liabilities
a. True b. False Indicate whether the statement is true or false
When a business's product has no considerable and sustainable differential advantage in a quality-sensitive market, with many competitors, many substitutes and easy competitor entry, conditions are favorable for a skim pricing strategy
Indicate whether the statement is true or false
Springfield Company purchases new factory equipment. Per the terms of the contract, Springfield must pay the freight charges, will receive a manufacturer's discount off the invoice price on the equipment, and will have some setup expenses to pay. As a result, the acquisition cost of equipment recorded on Springfield's books will be the sum of the invoice price
a. less any discounts, plus transportation costs, installation charges, and any other costs incurred before the equipment is ready for use. b. less any discounts and transportation costs, plus installation charges and any other costs incurred after the equipment is ready for use. c. plus transportation costs, installation charges, and any other costs incurred before the equipment is ready for use. d. less transportation costs, installation charges, and any other costs incurred after the equipment is ready for use. e. less any discounts and installation charges, plus transportation charges and any other costs incurred after the equipment is ready for use.
A backlog in recording transactions is an example of a warning sign from the accounting system
Indicate whether the statement is true or false