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Questions
Q:
______________________ are often called mutual funds.
A. Unit investment trusts
B. Open-end investment companies
C. Closed-end investment companies
D. REITs
Q:
The Federal Trade Commission Act, as amended, prohibits
A) horizontal mergers.
B) price-fixing agreements.
C) unfair competitive practices and deceptive acts.
D) price discrimination.
Q:
Which of the following statements is true regarding forward contracts, futures contracts, options and swaps?
A) A forward contract can be purchased on the open market and is recorded at its historical cost, then adjusted for changes in the market.
B) A futures contract is negotiated between two parties who are betting in the opposite direction on the movement of the underlying price.
C) An option is a contract requiring the holder to either "put" or "call" an underlying asset at a specified point in time.
D) A swap is a contract between two parties to exchange an ongoing stream of cash flows.
Q:
Which of the following is not a type of real estate investment trust?
I. Equity trust
II. Debt trust
III. Mortgage trust
IV. Unit trust
A. I and II only
B. II only
C. II and IV only
D. I, II, and III
Q:
Gains or losses on foreign currency transactions are recorded before the related receivable or payable is settled when
A) the government cannot set an exchange rate for the foreign currency.
B) the foreign currency is unknown.
C) the fiscal year ends after the settlement of the receivable or payable.
D) the fiscal year ends before the settlement of the receivable or payable.
Q:
For which market structure do economists have the least precise model of price determination?A) Perfect competition in the short run B) Perfect competition in the long runC) Oligopoly D) Monopoly
Q:
Which of the following is a true statement regarding the recording of a transaction which involves foreign currency?
A) A transaction is always settled in the currency in which it is denominated.
B) A transaction is always measured in the currency in which it is denominated.
C) A transaction is always settled in the currency in which it is measured.
D) A transaction is always recorded in the currency in which it is denominated.
Q:
Suppose a ten firm industry has total sales of $35 million per year. The largest firm have sales of $10 million, the third largest firm has sales of $4 million, and the fourth largest firm has sales of $2 million. If fifth through tenth largest firms combined have annual sales of $12 million, the four-firm concentration ratio for this industry isA) 45.7 percent. B) 80 percent.C) 65.7 percent. D) none fo the above.
Q:
Measured by assets, about _____ of funds are money market funds.
A. 15%
B. 25%
C. 40%
D. 60%
Q:
Most real estate investment trusts (REITs) have a debt ratio of around _________.
A. 10%
B. 30%
C. 50%
D. 70%
Q:
When the billing for a U.S. company's sale to a company in a foreign country is denominated in U.S. dollars, ________ is required when preparing journal entries for the sale.
A) translation to a foreign currency
B) conversion to a foreign currency
C) translation to U.S. dollars
D) no translation
Q:
For a monopolistic competitive firm, which of the following is true in the long run?A) ATC is minimized. B) Economic profit is zero.C) P = MC. D) All of the above.
Q:
If a U.S. company is preparing a journal entry for a recent purchase, foreign-currency-denominated purchases must be measured in ________ at the purchase date using the foreign currency ________ rate on the purchase date.
A) foreign currency; spot
B) foreign currency; future
C) U.S. dollars; forward
D) U.S. dollars; spot
Q:
Low-load mutual funds have front-end loads of no more than _____.
A. 2%
B. 3%
C. 4%
D. 5%
Q:
Refer to the above figure. The profit-maximizing price and output for this monopolist areA) a price of P1 and output of Q1. B) a price of P4 and output of O1.C) a price of P2 and output of Q2. D) a price of P3 and output of Q3.
Q:
Higher portfolio turnover:
I. Results in greater tax liability for investors
II. Results in greater trading costs for the fund, which investors have to pay for
III. Is a characteristic of asset allocation funds
A. I only
B. II only
C. I and II only
D. I, II, and III
Q:
Which of the following is NOT correct concerning perfectly competitive firms in the long run?
A) Long-run economic profits are zero.
B) Price equals minimum long-run average cost.
C) Entrepreneurs earn the opportunity cost of their investment.
D) The opportunity cost of capital is zero.
Q:
Use the following information to answer the question(s) below.On October 4, 2010, Sooty Corporation borrowed 250,000 British pounds from a London bank, evidenced by an interest-bearing note payable due in one year. The note was payable in pounds. Exchange rates for pounds were:October 4, 2010 $1.59December 31, 2010 $1.55October 4, 2011 $1.61What exchange gain or loss appeared on Sooty's 2011 income statement?A) a loss of $15,000B) a loss of $5,000C) a gain of $15,000D) a gain of $5,000
Q:
Revenue sharing with respect to mutual funds refers to _________.
A. fund companies paying brokers if the broker recommends the fund to investors
B. allowing certain classes of investors to engage in market timing
C. charging loads to new investors in a mutual fund
D. directly marketing funds over the Internet
Q:
The marginal revenue curve of a perfectly competitive firmA) has a vertical intercept equal to exactly one -half of the vertical intercept for the demand curve.B) lies below the demand curve and above the average revenue curve.C) intersects the average revenue curve from above at the maximum point of the average revenue curve.D) is also the demand curve faced by the firm.
Q:
__________ funds stand ready to redeem or issue shares at their net asset value.
A. Closed-end
B. Index
C. Open-end
D. Hedge
Q:
OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what is the marginal cost to produce the 5th unit of output?A) $80 B) $60 C) $55 D) $20
Q:
Which of the following is a false statement regarding open-end mutual funds?
A. They offer investors a guaranteed rate of return.
B. They offer investors a well-diversified portfolio.
C. They redeem shares at their net asset value.
D. They offer low-cost diversification.
Q:
On December 5, 2010, Unca Corporation, a U.S. firm, bought inventory items from Skagerrak Corporation of Norway for 1,000,000 Norwegian kroner when the spot rate for kroner was $0.166. The purchase was denominated in kroner. At Unca's fiscal year end, December 31, 2010, the spot rate was $0.171. On January 4, 2011, Unca purchased 1,000,000 kroner for $167,500 and paid the invoice. How much gain or (loss) did Unca report in its 2010 and 2011 income statements, respectively?
A) $(5,000) and $1,500
B) $0 and ($1,500)
C) ($5,000) and $3,500
D) $0 and ($3,500)
Q:
For a hotdog vender, the hotdog buns represents hisA) fixed input. B) variable input.C) sunk cost. D) none of the above.
Q:
__________ fund is defined as one in which the fund charges a sales commission to either buy into or exit from the fund.
A. A load
B. A no-load
C. An index
D. A specialized-sector
Q:
An important problem with corporations isA) the inability of the government to control and tax the firms.B) the possibility of large liabilities for the owners. C) the separation of ownership and control.D) the difficulties with raising financial capital.
Q:
Investors who want to liquidate their holdings in a closed-end fund may ___________________.
A. sell their shares back to the fund at a discount if they wish
B. sell their shares back to the fund at net asset value
C. sell their shares on the open market
D. sell their shares at a premium to net asset value if they wish
Q:
Which of the following shows the feasible combinations of two goods that a consumer could afford given her money income?A) The budget constraint B) The indifference mapC) The income consumption curve D) The price consumption curve
Q:
Investors who want to liquidate their holdings in a unit investment trust may ___________________.
A. sell their shares back to the trustee at a discount
B. sell their shares back to the trustee at net asset value
C. sell their shares on the open market
D. sell their shares at a premium to net asset value
Q:
A U.S. importer that purchased merchandise from a South Korean firm would be exposed to a net exchange gain on the unpaid balance if the
A) dollar weakened relative to the Korean won and the won was the denominated currency.
B) dollar weakened relative to the Korean won and the dollar was the denominated currency.
C) dollar strengthened relative to the Korean won and the won was the denominated currency.
D) dollar strengthened relative to the Korean won and the dollar was the denominated currency.
Q:
On a hot summer day, a construction worker enters a McDonaldʹs fast -food restaurant. He orders the first Big Mac. He consumes it within 3 minutes. He then orders a second Big Mac and consumes it in 10 minutes. He eats only half of the third one in 18 minutes and throws away the rest. The store manager offers him the fourth for free. The construction worker says: ʺNo thanks.ʺ For the construction worker described above, we can say thatA) diminishing marginal utility set in only after he had consumed the second Big Mac.B) diminishing marginal utility began as soon as he had eaten the first Big Mac. C) diminishing marginal utility did not occur, he simply wanted to quit eating. D) the law of diminishing marginal utility only applies to durable goods.
Q:
Sponsors of unit investment trusts earn a profit by ___________________.
A. deducting management fees from fund assets
B. deducting a percentage of any gains in asset value
C. selling shares in the trust at a premium to the cost of acquiring the underlying assets
D. charging portfolio turnover fees
Q:
With respect to exchange rates, which of the following statements is true?
A) An official exchange rate is the "market" rate resulting from the supply and demand for a currency.
B) A floating exchange rate is the "market" rate resulting from the supply and demand for a currency.
C) A government cannot set an exchange rate for their currency that is higher (weakens their currency) than the quoted interbank market rate.
D) A government cannot set an exchange rate for their currency that is lower (strengthens their currency) than the quoted interbank market rate.
Q:
PxQxPyQyPzQz$10100$2050$25200109018602522510701590252751250151002529015251512025320Refer to the above table. Suppose the price of Y rises from $18 to $20. What is the cross price elasticity of demand between Y and Z?A) -1.7273 B) -1.1176 C) -0.8947 D) +1.7273
Q:
The greatest percentage of mutual fund assets are invested in ________.
A. bond funds
B. equity funds
C. hybrid funds
D. money market funds
Q:
The exchange rates between the Australian dollar and the U.S. dollar were as follows:
Jun 1 1$AUS = $.8328US
Jul 1 1$AUS = $.8356US
Aug 1 1$AUS = $.9111US
This chart shows a
A) strengthening Australian Dollar which makes it less expensive for Americans to buy Australian goods.
B) weakening Australian dollar which makes it less expensive for Americans to buy Australian goods.
C) strengthening Australian dollar which makes it more expensive for Americans to buy Australian goods.
D) weakening Australian dollar which makes it more expensive for Americans to buy Australian goods.
Q:
The actual value of price elasticity of demandA) measures the relative change in quantity demanded when there is a change in price. B) will change when the units good is measured in changes.C) varies with changes in supply. D) is always negative.
Q:
A fund that invests in securities worldwide, including the United States, is called ______.
A. an international fund
B. an emerging market fund
C. a global fund
D. a regional fund
Q:
Cass Corporation's balance sheet at December 31, 2011 included a $48,480 account receivable from Redmun Corporation of Mexico. The account receivable was denominated as 600,000 Mexican pesos. What entry did Cass make on January 16, 2012 when the account receivable was collected and the exchange rate for the peso was $.09?
A) Cash
54,000 Accounts Receivable
54,000 B) Cash
54,000 Exchange Gain
5,520 Accounts Receivable
48,480 C) Cash
48,480 Accounts Receivable
48,480 D) Cash
48,480 Exchange Loss
5,520 Accounts Receivable
54,000
Q:
ʺThe optimal level of pollution is zero.ʺ Do you agree or disagree? Why?
Q:
Which of the following funds invest specifically in stocks of fast-growing companies?
A. balanced funds
B. growth equity funds
C. REITs
D. equity income funds
Q:
On May 1, 2011, Deerfield Corporation purchased merchandise from a German firm for 78,000 euros when the spot rate for the euro was 1.48 euro per dollar. The account payable was denominated in the euro. Deerfield settled the account on August 1 when the spot rate for the euro was 1.39 euro per dollar. How much cash will Deerfield have to disburse to settle the account?
A) $ 52,702.72
B) $ 56,115.11
C) $108,420.00
D) $115,440.00
Q:
Describe four of the five major income maintenance programs in the United States that were discussed in the text.
Q:
Which of the following is not a type of managed investment company?
A. unit investment trusts
B. closed-end funds
C. open-end funds
D. hedge funds
Q:
Which of the following is the BEST example of a monopsonist?A) a household hiring a gardenerB) a turnip farmer hiring seasonal helpC) Hersheyʹs Chocolate Factory in Hershey, PA D) Vinaka Coffee Shop in Carlsbad, CA
Q:
Meric Corporation (a U.S. company) began operations on January 1, 2011, when the owner borrowed $150,000 to start the company. In the first month of operations, Meric had the following transactions:
January 3, 2011 Bought inventory for 100,000 Brazilian real on account. Must be paid with Brazilian real.
January 8, 2011 Sold 60% of inventory acquired on 1/3/11 for 32,000 British pounds on account. Invoice denominated in British pounds.
January 10, 2011 Paid $3,000 in other operating expenses
January 23, 2011 Acquired and paid half of the Brazilian real owed to the Brazilian supplier
January 28, 2011 Collected half of the 32,000 pounds from the customer in Great Britain and immediately converted them into U.S. dollars
The following exchange rates apply:
Date Rate Rate
January 3 $.6260 = 1 real $1.5950 = 1 pound
January 8 $.6230 = 1 real $1.5760 = 1 pound
January 10 $.6210 = 1 real $1.5880 = 1 pound
January 23 $.6250 = 1 real $1.5610 = 1 pound
January 28 $.6330 = 1 real $1.5570 = 1 pound
January 31 $.6180 = 1 real $1.5720 = 1 pound
Required: Complete the summary income statement and balance sheet for the month ended January 31, 2011 assuming there were no other transactions. January 31 INCOME STATEMENT Sales COGS Gross Margin Other Operating Expenses Exchange Gain / (Loss) Net Income BALANCE SHEET Cash Accounts Receivable Inventory Total Assets Accounts Payable Debt Retained Earnings Total Liab and Equity
Q:
The Vanguard 500 Index Fund tracks the performance of the S&P 500. To do so, the fund buys shares in each S&P 500 company __________.
A. in proportion to the market value weight of the firm's equity in the S&P 500
B. in proportion to the price weight of the stock in the S&P 500
C. by purchasing an equal number of shares of each stock in the S&P 500
D. by purchasing an equal dollar amount of shares of each stock in the S&P 500
Q:
Charin Corporation, a U.S. corporation, imports and exports small electronics. On December 1, 2011, Charin purchased components from an Egyptian manufacturer amounting to 500,000 Egyptian pounds. The purchase is payable in Egyptian pounds. At December 30, Charin wanted to take advantage of favorable exchange rates, but did not have the full amount required to pay off the entire amount. Charin wired the funds to pay off half of the balance owed, and expected to pay the remaining balance on January 3, 2012. Charin paid the remaining balance on January 3, 2012.
The respective exchange rates were as follows:
December 1, 2011 1 pound = $.170
December 30, 2011 1 pound = $.165
December 31, 2011 1 pound = $.175
January 3, 2012 1 pound = $.180
Required:
Document the journal entries related to these transactions for the four dates shown. If no entry is required, record "no entry."
Q:
The United Steelworkers is an example of a(n)A) craft union. B) industrial union.C) public-sector union. D) guild.
Q:
Assume that you have recently purchased 100 shares in an investment company. Upon examining the balance sheet, you note that the firm is reporting $225 million in assets, $30 million in liabilities, and 10 million shares outstanding. What is the net asset value (NAV) of these shares?
A. $25.50
B. $22.50
C. $19.50
D. $1.95
Q:
Plymouth Corporation (a U.S. company) began operations on September 1, 2011, when the owner borrowed $250,000 to establish the business. Plymouth then had the following import and export transactions with unaffiliated Chinese companies:
September 6, 2011 Bought material inventory for 100,000 yuan on account. Invoice denominated in yuan.
September 18, 2011 Sold 80% of inventory acquired on 9/6/11 for 110,000 yuan on account. Invoice denominated in yuan.
October 5, 2011 Acquired and paid the 100,000 yuan owed to the Chinese supplier
October 18, 2011 Collected the 110,000 yuan from the Chinese customer and immediately converted them into U.S. dollars
The following exchange rates apply:
Date Rate
September 6 $0.1544 = 1 yuan
September 18 $0.1607 = 1 yuan
September 30 $0.1591 = 1 yuan
October 5 $0.1578 = 1 yuan
October 18 $0.1593 = 1 yuan
Required:
1. What were Sales in the September month-end income statement?
2. What was the COGS associated with these sales?
3. What is the Accounts Receivable balance in the balance sheet at September 30, 2011?
4. What is the Inventory balance in the balance sheet at September 30, 2011?
5. What is the Exchange gain or loss that will be reported for the month of September?
Q:
The more inelastic the consumer demand for the final product, theA) greater will be the economic profit in a competitive market.B) greater the impact on employment from a change in the wage rate. C) more inelastic the demand for labor producing the product.D) more responsive the output demand to a change in the price of labor.
Q:
Assume that you have just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares outstanding. What is the net asset value (NAV) of these shares?
A. $12
B. $9
C. $10
D. $1
Q:
The Federal Trade Commission Act was designed to
A) prohibit bundling.
B) increase foreign trade.
C) prohibit cutthroat pricing.
D) limit company profits from foreign sales.
Q:
Blue Corporation, a U.S. manufacturer, sold goods to their customer in Hungary on December 12, 2011 for 6,000,000 Hungarian forints. The customer agreed to pay in Hungarian forints in 30 days. When the customer wired the foreign currency to Blue on January 11, 2012, Blue held them in their bank account until January 15 before selling them and converting them to U.S. dollars. The following exchange rates apply:
Dec 12, 2011 $0.0055
Dec 31, 2011 $0.0049
Jan 11, 2012 $0.0063
Jan 15, 2012 $0.0059
Required:
Record the journal entries that Blue would need related to the dates listed above. If no entry is required, state "no entry."
Q:
Net asset value is defined as ________________________.
A. book value of assets divided by shares outstanding
B. book value of assets minus liabilities divided by shares outstanding
C. market value of assets divided by shares outstanding
D. market value of assets minus liabilities divided by shares outstanding
Q:
On November 4, 2011, the Oak Corporation, a U.S. corporation, purchased components for an assembly machine from Maple Industries, a Canadian Company, which were put into Parts Inventory. The purchase price was 80,000 Canadian dollars and Oak agreed to pay in Canadian dollars in 90 days. Both corporations are on a calendar year accounting period. Assume that the spot rates for the Canadian dollar on November 4, 2011, December 31, 2011, and February 2, 2012, are $0.9985, $1.0191, and $1.0064, respectively.
Required:
Record the November 4, December 31, and February 2 transactions in the General Journals of Oak Corporation and Maple Industries. If no entry is required on a particular date, indicate "No entry" in the General Journal.
Q:
A market situation in which there are very few sellers isA) oligopoly. B) perfect competition.C) monopoly.D) monopolistic competition.
Q:
The primary measurement unit used for assessing the value of one's stake in an investment company is ___________________.
A. net asset value
B. average asset value
C. gross asset value
D. total asset value
Q:
Suppose an industry has total sales of $25 million per year. The two largest firms have sales of $6 million each, the third largest firm has sales of $2 million, and the fourth largest firm has sales of $1 million. The four-firm concentration ratio for this industry isA) 36 percent. B) 60 percent. C) 50 percent. D) 25 percent.
Q:
Management fees for open-end and closed-end funds typically range between _____ and _____.A. .2%; 1.5%B. .5%; 5%C. 2%; 5%D. 3%; 8%
Q:
In September of 2011, Gunny Corporation anticipates that the price of heating oil will increase soon, and wishes to lock in a firm price for the winter months. They enter into a forward contract with Selton Industries to buy 100,000 barrels of oil at $160 per barrel in December 2011. Selton's cost of production of the heating oil is $120 per barrel.
Required:
Determine the economic impact of the transaction to Selton (the seller of the heating oil) at the market price levels indicated in the table below, with and without the hedge. Market Price per Barrel
Forward Price per Bushel
Unhedged Market Gain / (Loss)
Economic Gain / (Loss) on Forward
Economic Income with Hedge $180 170 160 150 140
Q:
As of 2014, approximately _____ of mutual fund assets were invested in money market funds.
A. 5%
B. 18%
C. 44%
D. 66%
Q:
The table below provides either a direct or indirect quote for a given foreign currency unit, and the related units of that foreign currency. Quote
Foreign Currency Units
U.S. Dollars 1 fcu : $0.0065
40,000 fcu $1 : .0098 fcu
980 fcu 1 fcu : $0.0796
80,000 fcu $1 : .0688 fcu
55,040 fcu 1 fcu : $0.3597
110,000 fcu $1 : .8443 fcu
25,329 fcu 1 fcu : $1.68
50,000 fcu $1 : 1.64 fcu
29,520 fcu 1 fcu : $12.67
5,000 fcu $1 : 184.66 fcu
738,640 fcu 1 fcu : $166.79
700 fcu Required:
Complete the table, indicating the amount of U.S. Dollars that is the equivalent of the foreign currency shown, based on the direct or indirect quote provided.
Q:
The demand curve faced by a monopolistically competitive firm isA) horizontal. B) vertical.C) downward sloping. D) upward sloping.
Q:
Refer to the above figure. Profits for this firm areA) zero.B) negative. C) positive.D) undetermined without more information.
Q:
Slade Corporation, a U.S. company, purchased materials on account from a manufacturer in Mexico on June 15. The invoice was denominated in the shipper's currency for 480,000 pesos. The goods were paid for on July 18. Slade closes their fiscal year on June 30, and used the following indirect quotes to measure the amounts related to the transactions.
June 15 $1.00 = 12.50 pesos
June 30 $1.00 = 12.80 pesos
July 18 $1.00 = 12.00 pesos
Required:
Show all related journal entries for Slade Company.
Q:
Lincoln Corporation, a U.S. manufacturer, both imports needed materials and exports finished products. Their receivables and payables are listed below, prior to year-end adjustments or preparation of the closing entries. Foreign Currency Units
Rate at Date of Transaction
Per Books in U.S. Dollars
Current Rate at 12/31/11 ACCOUNTS RECEIVABLE Japanese yen
14,678,000
$0.0109007
160,000
$0.0120 Euros
50,000
1.2372
61,860
1.4235 Hungarian forint
50,000,000
0.0044
220,000
0.0053 TOTAL 441,860 ACCOUNTS PAYABLE Euros
50,000
1.2378
61,890
$1.4235 Mexican pesos
1,250,000
0.0799
99,875
0.0845 Indian rupee
4,000,000
0.0216
86,400
0.0223 TOTAL 248,165 Required:
Determine the amount at which receivables and payables should be reported on December 31, 2011, and the net exchange gain or loss that would be reported as a result of year-end adjustments.
Q:
Which of the following is NOT true for a perfectly competitive firm in the long run?A) MR = MC B) MC > LAC C) Price = MC D) SAC = LAC
Q:
The type of mutual fund that primarily engages in market timing is called _______.
A. a sector fund
B. an index fund
C. an ETF
D. an asset allocation fund
Q:
Piel Corporation (a U.S. company) began operations on January 1, 2011, when common stock was issued for $250,000. In the first two months of operations, Piel had the following transactions:
January 15, 2011 Bought inventory for 100,000 Mexican pesos on account
January 26, 2011 Sold 70% of inventory acquired on 1/15/11 for 44,000 Saudi riyals on account
January 27, 2011 Paid $1,000 in other operating expenses
February 2, 2011 Sold additional inventory that cost $1,000 for $3,000 cash to a U.S. company.
February 15, 2011 Acquired and paid the 100,000 pesos owed to the Mexican supplier
February 21, 2011 Paid $1,500 in other operating expenses
February 28, 2011 Collected the 44,000 riyals from the Saudi customer and immediately converted them into U.S. dollars
The following exchange rates apply:
Date Rate Rate
January 15 $.11 = 1 peso $.23 = 1 riyal
January 26 $.12 = 1 peso $.24 = 1 riyal
January 31 $.13 = 1 peso $.25 = 1 riyal
February 15 $.14 = 1 peso $.26 = 1 riyal
February 28 $.15 = 1 peso $.27 = 1 riyal
Required:
Complete the summary income statement and balance sheet for the month ended January 31, 2011 and February 28, 2011, assuming there were no other transactions. January 31
February 28 INCOME STATEMENT Sales COGS Gross Margin Other Operating Expenses Exchange Gain / (Loss) Net Income BALANCE SHEET Cash Accounts Receivable Inventory Total Assets Accounts Payable Common Stock Retained Earnings Total Liab and Equity
Q:
For a firm in a perfectly competitive industryA) the demand curve is unitary elastic throughout.B) marginal revenue and product price are equal at every level of output. C) the price elasticity of demand is zero.D) more output can be sold only if the firm unilaterally lowers its product price.
Q:
Which of the following result in a taxable event for investors?
I. Short-term capital gain distributions from the fund
II. Dividend distributions from the fund
III. Long-term capital gain distributions from the fund
A. I only
B. II only
C. I and II only
D. I, II, and III
Q:
Johnson Corporation (a U.S. company) began operations on December 1, 2010, when the owner contributed $100,000 of his own money to establish the business. Johnson then had the following import and export transactions with unaffiliated Mexican companies:
December 12, 2011 Bought inventory for 150,000 pesos on account.
Invoice denominated in pesos.
December 15, 2011 Sold 60% of inventory acquired on 12/12/11 for 120,000 pesos on account. Invoice denominated in pesos.
January 1, 2012 Acquired and paid the 150,000 pesos owed to the Mexican supplier
January 15, 2012 Collected the 120,000 pesos from the Mexican customer and immediately converted them into U.S. dollars
The following exchange rates apply:
Date Rate
December 12 $.11 = 1 peso
December 15 $.12 = 1 peso
December 31 $.13 = 1 peso
January 1 $.14 = 1 peso
January 15 $.15 = 1 peso
Required:
1. What were Sales in the income statement for the year ended December 31, 2011?
2. What was the COGS associated with these sales?
3. What is the Accounts Payable balance in the balance sheet at December 31, 2011?
4. What is the Inventory balance in the balance sheet at December 31, 2011?
Q:
OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what are the total fixed costs for an output of 4?A) $0 B) $120 C) $100 D) $220
Q:
Rank the following fund categories from most risky to least risky:
I. Equity growth fund
II. Balanced fund
III. Sector fund
IV. Money market fund
A. IV, I, III, II
B. III, II, IV, I
C. I, II, III, IV
D. III, I, II, IV
Q:
For a hotdog vender, the hotdog stand represents hisA) fixed input. B) variable input.C) diseconomies of scale. D) none of the above.
Q:
Behd Company, a U.S. firm, sold some of its inventory to Edinburgo Company, a company based in Scotland, on November 27, 2011, when the local currency unit (the pound Sterling, "GBP") was trading at $1.64 : 1 GBP. The sales agreement called for Edinburgo to pay 140,000 GBP on January 26, 2012. Additional exchange rates are shown below:
December 31, 2011 $1.7125
January 26, 2012 $1.7220
Required:
Show all related journal entries for Behd Company.
Q:
The average maturity of fund investments in a money market mutual fund is _______.
A. slightly more than 1 month
B. slightly more than 1 year
C. about 9 months
D. between 2 and 3 years