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True or False
1. One of the company's sources of funds is its own
2. In a debt equity, there exists a debtor and creditor relationship.
3. Supplier's credit as a source of fund is advantageous both to the debtor and the creditor.
4. One can open a deposit account with a lending institution.
5.
Step by step
Solved in 4 steps
- 1. IS THE FOLLOWING STATEMENT TRUE or FALSE? “A financial security is simply a contractbetween the provider of funds and the user of these funds that clearly specifies the amount of money that hasbeen provided and the terms and conditions of how the user is going to repay the provider.”a. Trueb. False2. IS THE FOLLOWING STATEMENT TRUE or FALSE? “A share of stock represents ownership of acorporation divided up into units, so that multiple people can own a percentage of the business.”a. Trueb. False3. A consol is a bond that:a. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 30 years.b. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 50 years.c. Does not pay an annual coupon (i.e., the annual coupon payment is $0) but when it matures pays out thepar value of the bond.d. Pays a fixed annual coupon amount forever.e. Does not pay an annual coupon (i.e., the annual coupon payment is $0) and never maturesA bank loan approved for the business that has been paid into the bank account will have the following impact on the accounting equation. Group of answer choices Increase equity and increase asset Decrease an asset and decrease a liability Decrease an asset and decrease stockholders’ equity Increase an asset and increase a liabilityWhich of the following is a Long Term Source of Finance? a. Customer Advances b. Equity Shares c. Trade Credit d. Bank Credit
- 1.Read the statements below and answer the question - The earnings process should be completed entitling the bank to the right to receive - Obligations arises on the part of the customer to remit fixed or determinable obligations - Amount received is known and if not collected is collectable with reasonable certainty What do the above statement reflect? (A) Revenue recognition principles (B) Expenses recognition principles (C) Provision recognition (D) Debt recognition principles 2.An asset is anything that is capable of generating positive cash flows or other economic benefits in the future either by itself or in combination with other assets which the financial institution has acquired the right to as a result of past transactions or events. Although the capacity of the financial institution to control benefits is usually the result of legal rights, an item may nonetheless satisfy the definition of an asset even there is no legal control. Based on the above statement which of…1. which of the following transactions will result in the increase and decrease in liability? a. payment of loan by installmentb. borrowed money from the bankc. issued a promissory note in payment of a liabilityd. request for an extension of the date of payment 2. a statement which shows where the money of the business is obtained and used? a. statement of financial positionb. statement of cash flowsc. cash budgetd. statement of revenues and expensesStatement I: Users of the funds from finanical institutions and markets have the obligation to return the same without interest. Statement II: Financial instituions and markets are also concerned with creating financial asstes. Statement I is true. Statements I and II are false. Statement II is true. Statements I and II are true.
- When a firm sells its accounts receivable to raiseshort-term cash, it is engaging in a strategycalleda. factoring.b. financial planning.c. equity financingd. debt financing.e. drafting1. 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 liabilityI. What are terms of credit? From the viewpoint of a short-tent creditor, why do lines of credit increase a company's liquidity? How arc the unused portions of these lines presented in financial statements? 2. Why are investments in marketable securities shown separately from cash equivalents in the balance sheet?
- All the following are assets for commericial banks exept: A) loans B)cash C)Deposits D)Investment securitieswhich of the following is an operating avtivity? A. billing customers for services rendered but not yet paid for B. paying off a loan to the bank C. purchasing equipment for cash D. receiving cash investments from ownersD3 These statements are True or False? Please explain. 1. The role performed by banks in which thay stand behind their customers when those customers are unable to pay a debt obligation is known as the discounting valuable paper role. 2. Collaterals should be considered as the primary resource to pay off the loans
