A Personal Consumer Loan Could Be Used to

question 141

Multiple Choice

A personal consumer loan could be used to

• A) consolidate several loans into one.
• B) purchase a car.
• C) cover a temporary cash shortfall.
• D) buy a mobile home.
• E) do all these things.

Identify and explain the components and importance of the summary of significant accounting policies in financial statements.

Distinguish between the direct and indirect methods of cash flow reporting.

Recognize the impact of net profit margin ratio and total asset turnover ratio on return on assets.

Understand the concept of gross profit and how it is influenced by operating expenses and cost of goods sold.

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Definitions:

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry and the nation's stock and options exchanges.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically including balance sheets, income statements, and cash flow statements.

Constructive Fraud

Deception or misrepresentation made without the intent to deceive, usually due to neglect or failure to fulfill a duty, which causes harm to another party.

Grossly Negligent

A severe lack of care or the extreme departure from the care a reasonable person would exercise in a similar situation, often resulting in harm or damage.