In which current and noncurrent asset categories are investments reported by Merck? What criteria are used to determine the classifications? The 2008 balance sheet reports the following two current and one noncurrent asset categories ($ in millions): 2009 2008 CURRENT ASSETS: Cash and cash equivalents $ 9,311.4 $ 4,368.3 Short-term investments $293.1 $1,118.1 NONCURRENT ASSETS: Investments $432.3 $6,491.3 In the summary of significant accounting policies (Note 2), Merck describes its policy regarding investments classified as "cash equivalents." It is consistent with the way most companies classify "cash equivalents." CASH AND CASH EQUIVALENTS -- Cash equivalents are comprised of certain highly liquid investments with original maturities of less than three months.
2. A Bond; is a loan amount lent to a Government, or business which pays a fixed interest rate for a fixed period of time. 3. A Mutual Fund; is a collection of investments managed by a professional investment firm, where investors can buy and sell shares of many different organizations or
C. What information about securities must companies disclose? Discuss how Merliss should report the proposed preferred stock issue. a. Dividend and liquidation preferences b. Participation rights c. Call prices and dates d. Conversion rates and dates e. Exercise prices and dates f. Sinking-fund requirements g. Unusual voting rights h. Contracts to issue additional shares i.
Why are CRAs (particularly, Moody’s Investors Service and Standard & Poor’s) so entrenched in financial markets? 3. What are the criticisms of CRAs and is it feasible for regulators to attempt to reduce the reliance of financial markets on CRAs? 4. The article refers to the various sovereign rating changes that have recently occurred.
Now the discount rate refers to the interest rate charged to commercial banks and other collection institutions on loans received by the Federal Reserve lending facility. Federal Reserve banks offer different discounts, these are: primary credit, secondary credit and seasonal credit, each have their own rates. The last one of the monetary tools listed is reserve requirements; this last one refers to the amount of funds that a depository institution must hold in reserve against deposit liabilities. These are subject to change if it is decided by the Board of
Accounting 300 Learning Team Week 2 4. Indicate how each business transaction affects the basic accounting equation. (a) Paid cash for janitorial services. Decrease Cash Increase Liabilities (b) Purchased equipment for cash. Decrease Cash Increase Assets (c) Issued common stock to investors in exchange for cash Increase Cash Decrease in Stock Equity.
D A) People buy shares in a mutual fund. B) A pension fund manager buys a short-term corporate security in the secondary market. C) An insurance company buys shares of common stock in the over-the-counter markets. D) A corporation issues new shares of stock. 6) Which of the following statements about financial markets and securities is true?
|Real Estate Depreciation |Most recently observed depreciation of real estate | |Plant and Equipment |Balance sheet value | |Plant and Equipment Investments | | |Plant and Equipment Depreciation | | |Financial Fixed Assets |Long term financial assets of the client | |Current Assets |Current assets of the client | |Trade debtors |Trade credit granted by the client to others | |Liquid Assets |Balance sheet item of the client
| Quality of financial system in which country the company is operating, i.e., how available debt is. | Source: Financial Management; Theory and Practice http://creditexpert.dnb.com/small-business-information/the-difference-between-business-risk-and-financial-risk/ b. When a company only finances through equity total risk is defined by business risk. But when it is the combination of equity financing and debt financing, total risk is the combination of business risk and financial risk. Total risk can be measured by company’s Return on Equity (ROE).
MULTIPLE CHOICE 1. In the accounting cycle, the last step is a. preparing the financial statements b. journalizing and posting the adjusting entries c. preparing a post-closing trial balance d. journalizing and posting the closing entries ANS: C DIF: Moderate OBJ: 04-01 NAT: AACSB Analytic | AICPA FN-Measurement 2. Which one of the following is not a difference between a retail business and a service business? a. in what is sold b. the inclusion of gross profit in the income statement c. accounting equation d. merchandise inventory included in the balance sheet ANS: C DIF: Moderate OBJ: 05-01 NAT: AACSB Analytic | AICPA BB-Industry 3. Net income plus operating expenses is equal to a. cost of merchandise sold b. cost