Cash Collections from Customers During the Period Can Be Computed

question 86

True/False

Cash collections from customers during the period can be computed as the ending balance in Accounts Receivable plus Sales during the period minus the beginning balance in Accounts Receivable.

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Definitions:

Cost of Preferred Stock

The effective rate that a company pays on its issued preferred shares, calculated by dividing the dividend by the current price of the stock.

Par Value

The face value of a bond or stock, as stated by the issuing company, which does not necessarily reflect market value.

Annual Dividend

The total dividend payment a shareholder receives from a company in one year.

Debt-Equity Ratio

A gauge illustrating the mix between shareholder equity and debt in a company’s asset-financing strategy.