11The distinction between a capital expenditure and an expense is not always clear-cut. True False 12Many companies will have a policy of expensing all items above a certain dollar amount. True False
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- 7. Net Working Capital is the difference between Current Assets andLong-Term Liabilities. T/F 8. APR takes into consideration compounding, whereas EAR does notfactor in compounding. T/FCost recovery can be.18 related to capital maintenance True False O11. Which type of financial assets are purchased only with the intent of selling them in the near future? DAFVTPL financial assets ⒸBFVTOCI Financial assets C. Amortized Cost financial assets OD. Investment accounted for using the equity method
- Q44 Cost of the capital is the minimum required rate of earnings or the cut-off rate of capital expenditure, is defined by a. William and Donaldson b. John J. Hampton c. Solomon Ezra d. James C. Van Horne9. Write-downs of inventories to their net realizable value are recognized a. in profit or loss b. in other comprehensive income c. directly in equity d. any of theseNet Fixed Assets and Depreciation [L04] On the balance sheet, the net fixed assets (NFA) account is equal to the gross fixed assets (FA) account (which records the acquisition cost of fixed assets) minus the accumulated depreciation (AD) account (which records the total depreciation taken by the firm against its fixed assets). Using the fact that NFA = FA – AD, show that the expression given in the chapter for net capital spending, NFAend – NFAbez + D (where D is the depreciation expense during the year), is equivalent to FAend - FAbeg Use the following information for Taco Swell, Inc., for Problems 21 and 22 (assume the tax rate is 21 percent): 2017 2018 Sales $16,549 $18,498 Depreciation 2,376 2,484 Cost of goods sold 5,690 6,731 Other expenses 1,353 1,178 Interest 1,110 1,325 Cash S,676 9.247 Accounts receivable 11,488 13,482 Short-term notes payable 1,674 1,641 Long-term debt 29,060 35,229 Net fixed assets 72,770 77,610 Accounts payable 6,269 6,640 Inventory 20,424 21,862 Dividends…
- If a company capitalizes costs that should be expensed, how is its income statement for the currentperiod impacted?A. Assets understatedB. Net Income understatedC. Expenses understatedD. Revenues understatedWhich of the following will cause owner's capital to decrease?Select one:a. Capitalb. Profitc. Drawingsd. LiabilityThe following are methods in calculating the capital cost allowance, EXCEPT a. Double-Declining Method b. Quarterly-Deduction Method c. None of the Above d. Straight-Line Method X
- The following are deductions from items of income, except: * Cost of sales or service Regular allowable deductions Net Operating Loss Carry-Over Net Capital Loss Carry-Over1. Definitions (S9.1-S9.3) Define the following terms: a. Cost of debt. b. Cost of equity. c. Company cost of capital.Please prepare a cost by nature/expense by nature income statement for the following points. In particular please explain whether point a) (first point) should be included in the income statement. In point a), Is there sufficient information for write-off expenses to be recorded in the income statement and should write-off of assets be included in the income statement? a) Write off (in minus) of short-term financial assets 9 000b) Other costs by nature 4 000c) Change in inventories of traded goods + 2 000d) Revenue from sale of building 50 000e) Income tax 10%f) Revenue from sale of traded goods 12 000g) Retained profits from previous years 10 000h) Accumulated depreciation of building 49 000i) Historical cost of building 102 000