Your Friend,Brett Called to Tell You He Just Left a Sales

question 307

True/False

Your friend,Brett called to tell you he just left a sales pitch for a new web site development franchise where "he can get in for a few thousand dollars." He wants to know if you are ready to invest too.Although you lack expertise in graphic design or html programming,this should be a safe investment since it is already advertised as a franchise system.It's probably too good to pass up.

Explain the depreciation of property, plant, and equipment and the valuation of intangible assets.

Understand how financial information's relevance and reliability are maintained through standards such as generally accepted accounting principles (GAAP).

Identify the components of shareholders' equity and understand its reporting.

Recognize the importance of liquidity order in presenting current assets and liabilities in financial statements.

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Definitions:

TIE

Times Interest Earned, a financial ratio that measures a company's ability to meet its debt obligations based on its current income.

Operating Costs

The day-to-day expenses involved with running a business, excluding costs associated with production.

Assets

Resources owned or controlled by an entity with expected future economic benefits.

Sales

The total revenue earned from the sale of goods or services related to a company's primary operations.