Accounting Exam 3 Practice Solutions: Liabilities, Equity, Cash Flow
Reporting and Analyzing Current Liabilities
Cobb Company has been under investigation for a potential lawsuit. It is probable that Cobb Company will have to pay $1,000,000 to settle a pollution and environmental damage case. What is the necessary action that Cobb Company should take regarding the lawsuit?
- a. Record the liability.
- b. Disclose information about the lawsuit in the notes to the financial statements.
- c. Nothing because no disclosure is necessary.
- d. Record the liability and disclose information
Understanding Accounting Basics: Debits, Credits, and Transactions
Debit Normal Balance Question
A debit is not the normal balance for which of the following accounts?
- Asset account
- Dividends account
- Expense account
- Common Stock account
Journal Entry for Supplies Purchase
The purchase of supplies on account should result in:
- A debit to Accounts Payable and a credit to Supplies.
- A debit to Supplies and a credit to Accounts Receivable.
- A debit to Supplies and a credit to Accounts Payable.
- A debit to Cash and a credit to Supplies.
Sheldon Cooper Company: June Transactions Analysis
Transactions
Read MoreBusiness Finance Essentials: Tax, Assets, and Accounting
Corporate Income Tax (CIT) Essentials
1. Understanding Corporate Income Tax (CIT)
Corporate Income Tax (CIT) is a direct tax that taxes the economic ability (profits) of a company. It is periodic, calculated at the end of the fiscal year, and proportional, with a flat tax rate of 25% (general). CIT is also linked to accounting, starting from the accounting result (EBT) and adjusting it using tax rules.
2. Scope of Corporate Income Tax
CIT applies in all of Spain, with the following exceptions:
- Special
Mastering Management & Decision Making: Theories & Processes
Henry Mintzberg’s Management Theories
Henry Mintzberg: Background & Contributions
Henry Mintzberg, born in Montreal in 1939, is renowned for his work on the structure and design of organizations, as well as strategy.
Mintzberg’s 10 Managerial Roles
Mintzberg identified ten common roles of managers, categorized into three groups:
Interpersonal Roles
- Figurehead: The director or chief; has authority in the organization. Acts as a legal and social head.
- Leader: Responsible for the motivation and management
Corporate Equity Accounting: Stock, Repurchases, Options, & Dividends
Equity Financing: Paid-in Capital
Common Stock Fundamentals
When a corporation is formed, a single class of stock, known as common stock, is usually issued.
Common Stock Rights
- Voting rights
- Share in profits when dividends are declared
- Share in the distribution of assets if the company is liquidated
Preferred Stock Fundamentals
Corporations may later find that there are advantages to issuing one or more additional classes of stock with varying rights and priorities. Stock with certain preferences (rights)
Read MoreForeign Exchange Market Fundamentals
The foreign exchange market, or currency market, facilitates foreign currency and coin transactions between different countries.
Market Exchange: This is where currencies of different countries are bought and sold.
Key Concepts in Currency Exchange
Nominal Exchange Rate
The nominal exchange rate is the relative price of one currency in terms of another. It represents the number of foreign currency units required to obtain one unit of the national currency.
Depreciation of Exchange Rates
Depreciation of
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