An Alumnus Donates Securities to a Private College and Stipulates

question 47

Multiple Choice

An alumnus donates securities to a private college and stipulates that the principal be held in perpetuity and income from the securities be used for faculty travel.Dividends received from the securities should be recognized as increases in:

• A) Endowments.
• B) Unrestricted net assets.
• C) Permanently restricted net assets.
• D) Temporarily restricted net assets.

Identify what constitutes an unusual item on an income statement and the implications of various unusual items.

Understand the presentation of other comprehensive income and the components of a corporate annual report.

Match financial ratios to their appropriate uses, demonstrating an understanding of liquidity, solvency, profitability, and efficiency analysis.

Understand and apply financial ratio analysis to assess a company’s profitability, liquidity, and solvency.

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Definitions:

Credit Card

A payment card issued by a financial company giving the holder an option to borrow funds, typically at point of sale.

Factor

A finance company or bank that buys receivables from businesses and then collects the payments directly from the customers.

Receivables

Receivables are amounts of money owed to a company by its customers or other parties for goods or services provided on credit.

Service Charge

A Service Charge is a fee collected to pay for services related to a primary product or service, such as handling fees, maintenance, or repair services.