A company purchases shares on 1/1/01 for $60.00. During the year, quarterly dividends of $.50 per share were declared and paid. The market price of the stock on 12/31/01 is $67.00. What is the investor's return for the year?
3.33%
11.67%
12.50%
15.00%
15%
A company purchases shares on 1/1/01 for $60.00. During the year, quarterly dividends of $.50 per share were declared and paid. The market price of the stock on 12/31/01 is $67.00. What is the investor's return for the year?Your answer: 15.00%
(($4($.50) + ($67 – $60))/$60) = 15.00%
A working understanding of financial accounting principles enables better decision making.
True
False
true
Obtaining a working knowledge of financial accounting and its underlying principles enables a person to understand the information conveyed about an organization so that better decisions can be made.
After an organization provides financial accounting data, an individual with financial accounting knowledge can assess the organization’s financial health.
True
False
true
Many people are seriously interested in evaluating the degree of success achieved by a particular organization as well as its prospects for the future. They seek information. Financial accounting provides data that these individuals need and want.
Financial accounting is the communication of information about a business so individuals can assess its financial health and prospects.
True
False
true
The communication of financial information about a business or other type of organization to external audiences in order to help them assess its financial health and prospects. It is the communication of information about a business or other type of organization (such as a charity or government) so that individuals can assess its financial health and prospects.
A company that is struggling financially should expect all of the following EXCEPT:
pay cuts.
layoffs.
larger pay raises.
resource reduction.
larger pay raises
A financially healthy organization can afford to hire new employees, buy additional equipment, or pursue major new initiatives. Conversely, when a company is struggling and prospects are dim, employees might anticipate layoffs, pay cuts, or reductions in resource.
A company that is doing well financially should expect all of the following EXCEPT:
additional equipment.
layoffs.
larger pay raises.
new initiatives.
layoffs
Will Bostic is a manager for a local manufacturing company. Here are four decisions he made at his job today. Which of these was likely to have required him to make use of his knowledge of financial accounting?
He decided to sell goods to a retailer on credit.
He hired additional factory workers in anticipation of the holiday season.
He rearranged the schedule to a four-day workweek.
He supervised a training session of a team of salespeople.
He decided to sell goods to a retailer on credit.
Will Bostic must judge whether it is wise to permit creditor to buy goods now or wait until later to remit the money. If payments are received on a timely basis, the manufacturer will have found a new outlet for its merchandise. Profits will likely increase. Unfortunately, another possibility also exists. Creditor could make expensive purchases but then be unable to make payment, creating significant losses for the manufacturer.
Select the false statement about the two branches of accounting.
Financial accounting focuses on conveying relevant data to external parties.
Managerial accounting communicates information within an organization so that internal decisions can be made.
Financial accounting and managerial accounting do not have the same objectives.
Financial accounting is better, more useful, and more important than managerial accounting.
Financial accounting is better, more useful, and more important than managerial accounting.
It is not that one of these areas of accounting is better, more useful, or more important than the other. Financial accounting and managerial accounting have simply been created to achieve different objectives. They both do their jobs well; they just do not have the same jobs.