Business & Finance

Comparative financial statements in which each amount is expressed as a percentage of a base amount and in which the base amount is expressed as 100%, are called:

Comparative statements

Common-size comparative statements

General-purpose financial statements

Base line statements

Index statements

 

42. The ability to provide financial rewards sufficient to attract and retain financing is called:

Liquidity and efficiency

Solvency

Profitability

Market prospects

Creditworthiness

 

43. A company has a profit margin of 8%. If net income is equal to $40,000 and average total assets is equal to $332,500, how much are net sales?

$3,200

$500,000

$26,600

$4,156,250

$372,500

 

44. Internal users of financial information:

Are not directly involved in operating a company

Are those individuals involved in managing and operating the company

Include shareholders and lenders

Include directors and customers

Include suppliers, regulators and the press

 

45. A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

$50,000

$5,000

$45,000

Zero. This is an operating activity

Zero. This is a financing activity

Solution:

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