The Use of Checks in Transactions

question 98

Multiple Choice

The use of checks in transactions

• A) entails lower information costs than the use of currency.
• B) entails fewer steps than settling transactions with currency.
• C) avoids the cost of transporting currency back and forth.
• D) entails fewer steps and lower information costs than settling transactions with currency.

Interpret the relevance of profitability ratios in evaluating management's operational effectiveness.

Compare company data with industry averages to assess a company's market standing.

Understand the impact of the profit margin ratio and the asset turnover ratio on a company's return on assets.

Recognize the reporting requirements for income from continuing operations and income (loss) from discontinued operations.

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Definitions:

Par Value

The stated value or face amount of a bond, stock share, or coupon as declared by the issuing entity.

Journal Entry

A record in the books of accounts that notes the details of a financial transaction.

Semiannual Interest

Interest that is calculated and paid twice a year, often used in bond and loan agreements.

Redeem Bonds

This term refers to the act of paying off or buying back bonds issued by a company before their maturity date, often at a predetermined price.