QUESTION 5 Which of the following statements is correct? O A. Cash receipts is the total cash outflow in a given month O B. Cash receipts are always greater than cash expenses. O C. The cash receipts and cash expenses are an important part of the cash budget O D. All are correct OE. All are incorrect Click Save and Submit to Save and submit. Click Save All Answers to save all anwang
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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- Match the following terms or phrases in (a–g) with the explanations in 1–8. Terms or phrases may be used more than once. Question 11 options: Current assets/Current liabilities Probable likelihood and estimable liability Measures the “instant” debt-paying ability of a company Current assets – Current liabilities (Cash + Temporary investments + Accounts receivable)/Current liabilities Cash + Temporary investments + Accounts receivable Probable likelihood of a liability but cannot be estimated Remote contingent liability Reasonably possible likelihood of a liability 1. Current ratio 2. Working capital 3. Quick assets 4. Quick ratio 5. Record an accrual and disclose in the notes to the financial statements 6. Disclose only in notes to financial statements 7. No disclosure needed in notes to financial statementsThe firm may have increased long-term debts to finance ________. I. an increase in gross fixed assets. II. an increase in current assets. III. a decrease in notes payable. Select one: a. I and III only b. I and II only c. All of the above d. II and III only4 . Both accounts payable and deferred revenue are classifi ed as current liabilities. Discuss the following statements: A . When assessing a company’s liquidity, the implication of amounts in accounts payable diff ers from the implication of amounts in deferred revenue. B . Some investors monitor amounts in deferred revenue as an indicator of future revenue growth.
- 1.The following is a current liability: a. A long-term debt with current maturity, which will be paid from cash held in separate funds. b. A debt with current long-term maturity, which will be retired by issuing new debt. c. A debt with current maturity, which will be converted into common shares. d. None of the above. 2. Debts (liabilities) refers to: a. Any account that maintains a credit balance after closing entries are made. b. Deferred credits that are recognized and measured in accordance with generally accepted accounting principles. c. Obligations to transfer in the future the participation of the owners' shares. d. Obligations arising from past transactions and which will be payable with assets or services rendered in the future.Current LiabilitiesPROBLEM 1: TRUE OR FALSE4. Financial liabilities other than FVPL liabilities are initiallymeasured at fair value plus transaction costs.5. Amortized cost financial liabilities are subsequently measuredat the present value of the cash outflows from the instrument.6. Financial liabilities may be subsequently reclassified betweenthe amortized cost and fair value measurement categories.7. Trade payables and other liabilities that are part of an entity'sworking capital may be presented as current liabilities even ifthey are expected to be settled beyond one year.8. According to PAS 1, a currently maturing debt that the entity'smanagement intends to refinance is presented as noncurrent.9. According to PFRS 15, if an entity expects that a portion of giftcertificates sold will not be redeemed, the entity recognizes theexpected breakage amount as revenue in proportion to thepattern of rights exercised by customers.10. Unearned revenue is revenue that is earned but not yet…EXERCISE 1Indicate whether each of the following statements is true or false. Support your answerswith the relevant explanations. A. Modigliani and Miller’s Proposition II assumes that increased borrowing doesnot affect the interest rate on the firm’s debt. (Explain your reasoning.)
- 1. Which of the following is not a financial instrument? a. accounts receivable b. accrued utilities payable c. cash d. advances to suppliers 2. Which of the following is not a financial asset? a. investment in bonds b. investment in held for trading securities c. prepaid income tax d. interest receivable 3. Which of the following is a financial liability? a. income tax payable b. unearned revenue c. warranty obligation d. lease liabilityQ4. A bank that finances long term loans with short term debt securities is exposed to a. increase in net interest income and increase in the market value of equity when interest rates increase. b. decrease in net interest income and increase in the market value of equity when interest rates decrease. c. decrease in net interest income and increase in the market value of equity when interest rates increase. d. decrease in net interest income and decrease in the market value of equity when interest rates increase. e. decrease in net interest income and decrease in the market value of equity when interest rates decrease.The debt equity ratio of a company is 1:1 state giving reasons, which of the following would improve, reduce or not change the ratio (i)Purchase, of machinery for cash (ii)Purchase of goods on credit (iii) Sale of furniture at cost (iv)Sale of goods at a profit (v)Redemption of debentures at a premium
- Current LiabilitiesPROBLEM 1: TRUE OR FALSE 6. Financial liabilities may be subsequently reclassified betweenthe amortized cost and fair value measurement categories.7. Trade payables and other liabilities that are part of an entity'sworking capital may be presented as current liabilities even ifthey are expected to be settled beyond one year.Question 3 Company X has issued fixed-rate debt and wishes to "unlock" its interest rate exposure as it believes variable rates may decline. The company enters into an interest rate swap whereby it agrees to receive a fixed rate of interest, and pay a variable rate referenced to LIBOR and based on a notional amount that corresponds to the principal amount of the debt. Which of the folllowing statement is false.? the company may be impacting by reference rate reform and therefore should consider the implications of ASC 848 the transaction the company is contemplating may qualify as a fair value hedge in order to achieve hedge accounting, the company will need to address a number of hedge accounting requirements, including documenting its objectives, the method of testing effectiveness among other matters. interest rate risk is not an eligible risk for hedge accounting purposes since it is clearly and closely related to the economic…6.On a statement of financial affairs, a company's liabilities should be valued at Select one: a.the present value of future cash flows. b.the amount expected to be paid if the company could honor its debts. c.net realizable value. d.the amount required for settlement. e.replacement cost.