As a normal rule of thumb, which of the following statements is true? A. Par val
ID: 2453380 • Letter: A
Question
As a normal rule of thumb, which of the following statements is true?
A. Par value exceeds the issue price of common stock.
B. Par value is correlated to dividends on common stock.
C. Par value is correlated to dividends on preferred stock.
D. Par value is equivalent to total paid in capital.
E. None of these.
In an effort to concentrate its resources in more profitable areas, Southern Steel Corporation recently sold its family pizza restaurant segment. The disposal constitutes:
A. an extraodinary item.
B. a discontinued operation which should be treated as a prior period adjustment.
C. a discontinued operation which should be disclosed net-of-tax effects.
D. a portion of income from continuing operations.
E. None of these.
Which of the following events are considered as extraordinary by the accounting profession?
A. Write-down or write-off of receivables, inventories, and intangible assets.
B. Gains and losses on the disposal of a business segment.
C. Gains and losses from the sale or abandonment of property, plant, and equipment.
D. Effects of a strike, including those against competitors and major suppliers.
E. None of these.
Which of these acronyms is generally not applicable to some form of inventory management?
A. RFID.
B. JIT.
C. EOQ.
D. POP.
E. None of these.
The formula for calculating return on investment (ROI) can be reduced to:
A. margin divided by turnover.
B. sales divided by assets.
C. income divided by sales.
D. assets divided by income.
E. None of these.
Explanation / Answer
As a normal rule of thumb, which of the following statements is true?
Answer: C. Par value is correlated to dividends on preferred stock.
Dividends have no effect on the par value of common stock. Companies that issue preferred stock, however, set a dividend rate on the stock that is based on par value.
In an effort to concentrate its resources in more profitable areas, Southern Steel Corporation recently sold its family pizza restaurant segment. The disposal constitutes:
Answer: C. a discontinued operation which should be disclosed net-of-tax effects.
Which of the following events are considered as extraordinary by the accounting profession?
Answer: E. None of these .
Because they are usual in nature or may be expected to recur as a consequence of customary and continuing business activities.
Examples include all of the following:
a.Write-down or write-off of receivables, inventories, equipment leased to others, deferred research and development costs, or other intangible assets
b.Gains or losses from exchange or translation of foreign currencies, including those relating to major devaluations and revaluations
c.Gains or losses on disposal of a component of an entity
d. Other gains or losses from sale or abandonment of property, plant, or equipment used in the business
e.Effects of a strike, including those against competitors and major suppliers
f.Adjustment of accruals on long-term contracts.
Which of these acronyms is generally not applicable to some form of inventory management?
Answer: A. RFID.
Radio Frequency Identification (RFID): The use of radio frequency technology including RFID tags and tag readers to identify objects. it is not used in inventory management.
The formula for calculating return on investment (ROI) can be reduced to:
Answer: D. assets divided by income.
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