Jim Is a Refrigeration Electrician

question 80

Multiple Choice

Jim is a refrigeration electrician.He has a large contract starting soon and knows he will run short of cash in purchasing supplies.However,he expects the client to begin making payments for his work two weeks after he begins.What financing arrangement would be best for Jim to arrange with his bank?

• A) open a line of credit
• B) increase his mortgage
• C) issue a credit card
• D) take out an operating loan

Recognize the accounting treatment for the conversion of preferred stock into common stock.

Identify how to calculate the shares issued during a stock conversion.

Analyze the impact of stock conversions on a company's balance sheet.

Distinguish between par value and market value of stock in the context of stock conversions.

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Definitions:

Operating Assets

Assets used by a business in its daily operations to generate income, including cash, inventory, and equipment.

Fixed Costs

Refers to costs that do not change in total regardless of the level of production or sales activity, like rent, salaries, and insurance.

Balanced Scorecard

A strategic planning and management system used to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Performance Measurement

The process of evaluating how effectively and efficiently an organization or individual achieves its objectives.