The higher the debt-to-equity ratio the greater the positive financial leverage.
Indicate whether the statement is true or false
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Q. 2) The terms _____________________________
_ planning, disaster recovery planning, business interruption planning, and business continuity planning have all been used to describe the backup and recovery control plans designed to ensure that an organization can recover from a major calamity.
Fill in the blank(s) with correct word
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Q. 3) Philipsburg Corporation sells mugs to fine retailers across the world. Data from its periodic inventory system is presented in the table below. Inventory is sold for 170 per unit. Operating expenses, excluding cost of goods sold, totaled 40,000.
Date Number of Units Unit Cost Total Cost
January 1 Beginning inventory 300 100 30,000
January 13 Purchase 400 110 44,000
January 22 Purchase 500 120 60,000
Which cost flow method would result in the HIGHEST taxable income for the period?
A) FIFO
B) LIFO
C) Weighted average method
D) Each of the methods would have equal net income for the period.
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Q. 4) Merchandise is sold on account for 90, and the sale is subject to a retail sales tax of 5.40 . The sales account should be credited for
a. 84.60.
b. 90.00.
c. 95.40.
d. 93.60.
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Q. 5) Match each of the following terms with its definition. Each term is used only once.
a. Allowance for uncollectible accounts
b. Net receivables
c. Contra-asset account
d. Credit card sales
_____ 1. An account that is subtracted from a related asset account
_____ 2. Credit sales made to customers who pay for the sale with a credit card issued by a bank or financial institution
_____ 3. The amount of accounts receivable a company actually expects to collect in cash
_____ 4. A contra account to accounts receivable, which shows the amount of money considered to be uncollectible from customers
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Q. 6) A bank statement
a. is a credit reference letter written by the company's bank.
b. lets a company know the financial position of the bank as of a certain date.
c. is a bill from the bank for services rendered.
d. shows the activity that increased or decreased the company's account balance.
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