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Q:
Which of the following statements about ʺinside informationʺ is FALSE?A) It is information that is not available to the general public.B) It is illegal to knowingly use inside information when trading stocks. C) Profits can be made using inside information.D) The government never imposes fines or other penalties for abuse of inside information.
Q:
What are common reasons why price escalation occurs in international marketing?
Q:
On May 1, Chuck Taylor formed Flash, a shoe consulting business. In order to start the business he invested $750,000 in cash. Enter the appropriate amounts reflecting the transaction into the accounting equation format shown below.
Q:
In a firm, an entrepreneur is one whoA) decides to hire or fire.B) works for the owner by running the firm.C) takes the risks associated with a business firm. D) represents the firm in legal proceedings.
Q:
What is the difference between variable-cost pricing and full-cost pricing? When would a company choose one over the other?
Q:
The accounts of Garfield Company with the increases or decreases that occurred during the past year are as follows: Except for net income, an investment of $3,000 by the owner, and a withdrawal of $11,000 by the owner, no other items affected the owner's capital account. Using the balance sheet equation, compute net income for the past year.
Q:
What are the key properties of indifference curves?
Q:
Describe what happens in parallel importing. What are the advantages and disadvantages of this practice?
Q:
At the beginning of the year, a company had $120,000 worth of liabilities. During the year, assets increased by $160,000 and at year-end they equaled $360,000. Liabilities decreased $20,000 during the year. Calculate the beginning and ending values of equity.
Q:
Using the above table, what is the marginal utility of the 4th soda?A) 23.2 B) 5 C) 10 D) 15
Q:
Differentiate the two ways price decisions are viewed.
Q:
A company has assets of $500,000 and equity of $350,000. What is the amount of liabilities?
Q:
Why is elasticity of demand greater for goods that are a large share of a consumerʹs budget?
Q:
In ________, a company has an ongoing relationship with a bank that routinely buys its short-term accounts receivable at a discount.
A) forfaiting
B) factoring
C) a barter transaction
D) a cash-in-advance transaction
E) an open accounts transaction
Q:
A Company has liabilities of $475,000 and $925,000 of equity. What is the amount of its assets?
Q:
If price decreases by 10 percent and quantity demanded increases by 30 percent, the price elasticity of demand will beA) 0.333. B) 3. C) 30. D) 300.
Q:
Sales on open accounts are
A) very common as a method of payment in foreign trade.
B) generally recommended when special merchandise is ordered by the buyer.
C) not generally recommended when there is political unrest in the importer's country.
D) recommended when the country of the importer imposes difficult exchange restrictions.
E) less risky for the seller when it involves new buyers.
Q:
Lorton's Web Services has assets of $265,000 and liabilities of $130,000. Calculate the amount of equity.
Q:
In a(n) ________ transaction, the seller makes a one-time arrangement with a bank or other financial institution to take over responsibility for collecting the account receivable.
A) forfaiting
B) factoring
C) barter
D) cash-in-advance payment
E) open account
Q:
The costs of pollution abatementA) increase at an increasing rate with the increase in pollution abatement.B) increase at a decreasing rate with the increase in pollution abatement. C) decrease at an increasing rate with the increase in pollution abatement. D) decrease at a decreasing rate with the increase in pollution abatement.
Q:
You are reviewing the accounting records of Cathy's Antiques, owned by Cathy Miller. You have uncovered the following situations. Compose a memo to Ms. Miller. Cite the appropriate accounting principle and suggest an action for each separate item.1) In August, a check for $500 was written to Wee Day Care Center. This amount represents child care for her son Brandon.2) Cathy plans a Going Out of Business Sale for May, since she will be closing her business for a month-long vacation in June. She plans to reopen July 1 and will continue operating Cathy's Antiques indefinitely.3) Cathy received a shipment of pine furniture from Quebec, Canada. The invoice was stated in Canadian dollars.4) Joseph Clark paid $1,500 for a dining table. The amount was recorded as revenue. The table will be delivered to Mr. Clark in six weeks.
Q:
________ leave sellers in a position where most of the problems of international commercial finance work to their disadvantage.
A) Letters of credit
B) Dollar drafts
C) Forfaiting contracts
D) Cash in advance agreements
E) Open accounts
Q:
Current income maintenance programs
A) often provide benefits to people who are working and earning substantially more than the poverty level.
B) reduce the incentive of recipients to work.
C) have safeguards to ensure that recipients work whenever physically able.
D) fail to make the income distribution more equal.
Q:
Prior to purchasing a tract of land, Flash had the land appraised at $300,000. The management of Flash purchased the land for $275,000. At what amount should the land be recorded on Flash books? What accounting principle supports your answer?
Q:
A company manufactures extremely specialized equipment for medical imaging. Because of its value, when the company exports this equipment overseas to hospitals, it generally requires ________, which is a nonrefundable deposit.
A) a letter of credit
B) a dollar draft
C) a forfaiting contract
D) cash in advance
E) an open account
Q:
A company town in the lumber or mining industry is an example of aA) monopoly. B) bilateral monopoly.C) buyerʹs monopoly. D) monopsony.
Q:
A parcel of land is offered for sale at $600,000, is assessed for tax purposes at $500,000, is recognized by its purchasers as easily being worth $575,000, and is sold for $570,000. At what amount should the land be recorded in the purchaser's books? What accounting principle supports your answer?
Q:
With ________, the seller assumes all risk until the actual dollars are received.
A) open accounts
B) irrevocable letters of credit
C) bills of exchange
D) factoring agreements
E) forfaiting contracts
Q:
A legal arrangement whereby a firm can hire only union labor is calledA) a union shop. B) a closed shop. C) a sweat shop. D) an open shop.
Q:
A ________, which shifts the buyer's credit risk to the bank, is not a guarantee of payment to the seller. Rather, payment is tendered only if the seller complies exactly with its terms.
A) open account
B) letter of credit
C) bill of lading
D) bill of regression
E) credit agreement
Q:
The characteristics below apply to at least one of the forms of business organization.a. Is a separate legal entity.b. Is allowed to be owned by one person only.c. Owner or owners are personally liable for debts of the business.d. Is a taxable entity.e. Is a business entity.f. May have a contract specifying the division of profits among the owners.g. Has an unlimited lifeUse the following format to indicate (with a "yes" or "no") whether or not a characteristic applies to each type of business organization.
Q:
Quantity of WorkersTotal ProductMarginal Marginal Physical Product Revenue Product00- -17 218 330 440 548 In the above table, what is the marginal physical product of worker 2?A) 10 B) 40 C) 11 D) 12
Q:
A(n) ________ means that once the seller has accepted the credit, the buyer cannot alter it in any way without permission of the seller.
A) open account
B) letter of credit
C) bill of lading
D) bill of regression
E) sales agreement
Q:
The total costs of federal regulation
A) encompasses only explicit costs of satisfying regulatory demands.
B) also includes the explicit costs associated with regulations issued by 50 different state governments.
C) encompasses only opportunity costs of satisfying regulatory demands.
D) encompasses both explicit and opportunity costs of satisfying regulatory demands..
Q:
Identify and describe the four basic financial statements:
Q:
What is the typical payment procedure for established customers where the goods are delivered and the customer is billed on an end-of-the-month basis.
A) an open account
B) a letter of credit
C) a bill of exchange
D) cash in advance
E) forfaiting
Q:
Describe the three types of activities reported on the statement of cash flows.
Q:
A Tweedle Dee-Tweedle Dum outcome occurs when
A) firms earn highest profits by adopting different product formats.
B) firms earn highest profits by adopting the same product format.
C) firms cheat after forming a cartel.
D) firms earn highest profits by cooperation.
Q:
OPEC is an example of a ________; it can control the price of oil by controlling the market.
A) cabal
B) monopoly
C) cartel
D) producers' association
E) competitive market
Q:
Discuss the relation between risk and return.
Q:
Explain how information products are ʺspecial.ʺ
Q:
A ________ exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce.
A) cabal
B) monopoly
C) cartel
D) producers' association
E) competitive market
Q:
Shawn Nelson, owner of LoveSac, made a decision to open a retail store in a local mall. He signed a three-month lease. His goal was to sell one Sac per day and this would cover his rent and allow him and his cousin to receive a $10 hourly wage. Identify the risk and return for Shawn.
Q:
What is an example of a price-fixing arrangement most directly associated with international marketing?
A) price escalation
B) barter houses
C) letters of credit
D) cartels
E) countertrade
Q:
In a monopolistically competitive market, entry into the industry
A) is relatively easy.
B) is blocked.
C) is difficult due to extensive government regulation.
D) is as difficult as entry into a monopoly.
Q:
What is the purpose of return on assets as an analytical tool?
Q:
In general, the end goal of all ________ activities is to reduce the impact of price competition or eliminate it.
A) reciprocal pricing
B) administered pricing
C) free trade
D) export-oriented trade
E) price skimming
Q:
In the above figure, the monopolistʹs profit-maximizing output level isA) A. B) B. C) C. D) D.
Q:
What distinguishes liabilities from equity?
Q:
What is true of price quotations for international sale?
A) Price quotations can be made only if it is shown that prices are lower in the importing country than in the exporting country.
B) Price quotations must specify the currency to be used, credit terms of the transaction, and documents required.
C) The price quotation and contract should define only the quantity of goods and not necessarily the quality.
D) Price quotations must be quoted only in terms of electronic trade dollars.
E) Price quotations need to specify the transportation charges but need not necessarily state what type of documentation needs to be used.
Q:
Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a higher long-run price, we know thatA) this is a decreasing-cost industry. B) this is an increasing-cost industry.C) some firms will be losing money in the long run.D) after further adjustments, price will fall to its original level.
Q:
________ are the primary outside source of aid for companies affected by the uncertainty of a countertrade.
A) Trade unions
B) Barter houses
C) Industry associations
D) Swap centers
E) Satellite towns
Q:
Explain the accounting equation, and define its terms.
Q:
For a perfect competitor, price equalsA) marginal revenue only.B) average revenue only.C) both average revenue and marginal revenue.D) neither marginal revenue nor average revenue.
Q:
What do barter houses do?
A) They specialize in trading goods acquired through barter arrangements.
B) They negotiate barter arrangements with countries that accept the U.S. currency as a countertrade.
C) They specialize in bartering with third countries for unused raw materials.
D) They direct bartered goods to the World Trade Organization for its approval.
E) They review disputes in barter arrangements at the request of the International Court of Justice.
Q:
Describe the relation between revenues, expenses, and net income.
Q:
Notice the costs as given in the table below. What is the marginal cost when total cost is $23?Total OutputTotal Costs0$101$152$183$204$215$23A) $5 B) $3 C) $2 D) $1
Q:
A crucial problem confronting a seller in a countertrade negotiation is determining the ________ for the goods offered as payment.
A) delivery method
B) warranties
C) insurance premiums
D) potential demand
E) the cost
Q:
Identify and describe the three major activities of business organizations.
Q:
The random walk theory says that
A) stock prices follow a trend for varying periods of time.
B) successive stock prices increase more than they decrease.
C) successive stock prices are dependent on the weighted average of the previous weekʹs prices.
D) successive stock prices are independent of each other.
Q:
The use of countertrade in international trade
A) allows trade with countries short of hard currency.
B) reduces a firm's competitive advantage.
C) increases the tax liabilities of trading firms.
D) leads to a loss of revenue.
E) is considered unethical.
Q:
How does the going-concern principle affect reporting asset values of a business?
Q:
By definition, a firm isA) a business organization that makes profits.B) a business organization that utilizes resources to produce goods or services with the goal of making a profit.C) a business organization that consists of more than one person.D) an organization, whether private or public, that may or may not make a profit.
Q:
When Burger Boys an American fast-food company, wanted to market its burgers and fries in France, it was asked to import French mustard to the United States in return. This is an example of
A) bargaining.
B) countervailing duties.
C) buy-back.
D) countertrade.
E) bribery.
Q:
Identify the two main groups involved in establishing generally accepted accounting principles.
Q:
One characteristic of indifference curves is thatA) they must intersect at the origin. B) they cannot intersect. C) they have a positive slope. D) they are straight lines.
Q:
What would be considered an advantage of leasing equipment rather than owning it?
A) Lease revenue tends to fluctuate greatly.
B) Leased equipment rarely breaks down.
C) Leasing helps guarantee better maintenance on overseas equipment.
D) Leasing keeps companies from using experimental equipment.
E) Leasing is less risky than outright sale of equipment.
Q:
Why should assets be recorded at historical cost?
Q:
Using the above table, what is the total utility of consuming 3 bottles of soda?A) 115 B) 120 C) 240 D) 135
Q:
An important selling technique to alleviate high prices and capital shortages for capital equipment is the ________ system.
A) leasing
B) antidumping
C) direct buy-back
D) consignment
E) rental
Q:
How does the objectivity principle support ethical behavior?
Q:
A product that has an elastic demand curve has all of the following characteristics EXCEPT A) it has many substitutes.B) a consumer can wait to buy the product. C) it has few or no substitutes.D) it is a large part of a consumerʹs income.
Q:
Assembly in the importing country is a way companies attempt to lower prices and avoid dumping charges. These assembly plants are known as ________ plants.
A) antidumping
B) screwdriver
C) import-oriented
D) export-oriented
E) automated
Q:
Identify the three basic forms of business organizations.
Q:
The formal definition of price elasticity of demand is
A) change in quantity demanded divided by change in price.
B) quantity demanded divided by price.
C) percentage change in quantity demanded divided by percentage change in price.
D) quantity demanded multiplied by price and divided by 100.
Q:
Dumping in the world markets is most likely to increase when
A) domestic production capacity is low.
B) demand in the home country is low.
C) demand in the foreign country is low.
D) foreign production capacity is high.
E) cost of production is low.
Q:
Describe the three important guidelines for revenue recognition.
Q:
The marginal benefit of pollution abatement
A) increases at an increasing rate as abatement increases.
B) decreases as pollution abatement increases because of the law of diminishing marginal utility.
C) increases as pollution abatement increases because of the law of increasing marginal returns.
D) is constant as pollution abatement increases.
Q:
For ________ duties to be levied on a product, it must be shown that prices are lower in the importing country than in the exporting country and that producers in the importing country are being directly harmed by the dumping of the product.
A) countertrade
B) domestic protection
C) countervailing
D) foreign practice
E) import restriction
Q:
Explain why ethics are an integral part of accounting.