The ABC Company Is Preparing Its Financial Statements on December

question 27

Multiple Choice

The ABC Company is preparing its financial statements on December 31. During the year, they purchased IBM stock for $20,000. On December 31, the market value of the stock is $8,000. The journal entry on December 31 will include a:

• A)debit to unrealized gain for $12,000.
• B)debit to unrealized loss for $8,000.
• C)debit to unrealized loss for $12,000.
• D)debit to realized loss for $12,000.

Recognize the benefits of using visual messages in cross-cultural communications.

Evaluate the pros and cons of oral communication channels.

Develop strategies to meet audience information needs effectively with appropriate examples.

Draft messages using direct and indirect approaches tailored for different audience types and scenarios.

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Definitions:

Receivables Turnover Ratio

A financial metric indicating how efficiently a company collects its receivables, calculated by dividing net credit sales by the average accounts receivable.

Credit-Granting Policies

Guidelines established by lenders to determine the criteria and conditions under which credit is extended to borrowers.

Vertical Analysis

An accounting method where each entry in a financial statement is listed as a percentage of another item, typically used for comparing companies of different sizes or assessing trends within a single company over time.

Cost of Goods Sold

The direct expenses related to the manufacturing of products that a company sells.