Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Chapter 15, Problem 13Q
Coffee Partners decides to close due to the increased competition from the national chains. If after liquidating the noncash assets there is not enough cash to cover accounts payable, what happens?
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Which of the following actions should Paperang Inc. take if it wants to reduce its cash conversion cycle?
a. Sell common stock to retire long-term bonds.
b. Sell an issue of long-term bonds and use the proceeds to buy back some of its common stock.
c. Take steps to reduce the DSO.
d. Start paying its bills sooner, which would reduce the average accounts payable but not affect sales.
e. Increase average inventory without increasing sales.
A commercial bank in Barbados faces serious liquidity problems; however, they have an asset that has the required value to meet their debt obligations. However, due to poor economic conditions, they may not get a buyer in time to purchase such an asset at their preferred price, so they may end up losing money for selling that asset lower than their preferred price, or if they choose not to sell the asset, they will not be able to meet their financial obligation. Which of the following strategy is best suited to manage the bank’s liquidity risk?
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Which of the following is true? Group of answer choices All of the other answers provided are false Solvency refers to how able the company is to pay its liabilities that are due in the next quarter Liquidity refers to how quickly the company can covert its assets into cash A company with greater financial flexiblity would be less able to survive during bad times
Chapter 15 Solutions
Principles of Accounting Volume 1
Ch. 15 - A partnership ________. A. has one owner B. can...Ch. 15 - Any assets invested by a particular partner in a...Ch. 15 - Which of the following is a disadvantage of the...Ch. 15 - Mutual agency is defined as: A. a mutual agreement...Ch. 15 - Chani contributes equipment to a partnership that...Ch. 15 - Juan contributes marketable securities to a...Ch. 15 - Which one of the following would not be considered...Ch. 15 - A well written partnership agreement should...Ch. 15 - What type of assets may a partner not contribute...Ch. 15 - How does a newly formed partnership handle the...
Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - When a partnership dissolves, the first step in...Ch. 15 - When a partnership dissolves, the last step in the...Ch. 15 - Prior to proceeding with the liquidation, the...Ch. 15 - Does a partnership pay income tax?Ch. 15 - Can a partners personal assets in a limited...Ch. 15 - Can a partnership assume liabilities as part of...Ch. 15 - Does each partner have to contribute an equal...Ch. 15 - What types of bases for dividing partnership net...Ch. 15 - Angela and Agatha are partners in Double A...Ch. 15 - On February 3, 2016 Sam Singh invested $90,000...Ch. 15 - Why do partnerships dissolve?Ch. 15 - What are the four steps involved in liquidating a...Ch. 15 - When a partner withdraws from the firm, which...Ch. 15 - What is the first step in a partnership...Ch. 15 - When a partnership liquidates, do partners get...Ch. 15 - Coffee Partners decides to close due to the...Ch. 15 - On May 1, 2017, BJ and Paige formed a partnership....Ch. 15 - The partnership of Chase and Chloe shares profits...Ch. 15 - The partnership of Tasha and Bill shares profits...Ch. 15 - Cheese Partners has decided to close the store. At...Ch. 15 - The partnership of Michelle, Amal, and Maureen has...Ch. 15 - The partnership of Tatum and Brook shares profits...Ch. 15 - Arun and Margot want to admit Tammy as a third...Ch. 15 - When a partnership is liquidated, any gains or...Ch. 15 - The partnership of Magda and Sue shares profits...Ch. 15 - The partnership of Arun, Margot, and Tammy has...Ch. 15 - Match each of the following descriptions with the...Ch. 15 - While sole proprietorships and corporations are...Ch. 15 - A partnership is thriving. The three partners get...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- hi, i need a quick answer. thanksarrow_forwardWhat does a firm need to do to improve liquidity? O A. Stock up on inventory in order to never run out of stock O B. Extend credit terms to customers in order to gain more sales O C. Pay all bills and payables when due O D. Speed up collection of accounts receivable from customersarrow_forwardshort answer Some companies go out of business due to lack of cash flow. Even if they may have a lot of assets and minimal debt, without cash these companies cannot continue to operate. So the question is, if a company's net worth and net income are both positive, under what circumstances might it go out of business because of lack of cash flow?arrow_forward
- 30. Why smaller companies choose direct method to write off uncollectible accounts? a. Uncollectible amount will be material b. Uncollectible amount will be immaterial c. There will not be any uncollectible accounts d. None of the optionsarrow_forwardWhat does a firm need to do to improve liquidity? Extend credit terms to customers in order to gain more sales Stock up on inventory in order to never run out of stock Pay all bills and payables when due Speed up collection of accounts receivable from customersarrow_forwardIdentify the incorrect statement below; Group of answer choices “Too much inventory can lead to increased risk of pilferage and obsolescence”. “Non-current assets are a part of working capital”. “If a firm has too big a cash balance, it should consider repaying some or all of it to its shareholders”. “Too high a figure of receivables might indicate poor credit control”.arrow_forward
- What is the effect of extending the collection period for accounts receivable? The collection cost will be reduced. Cash flows from operations may be higher than expected for the company’s sales. The company should expand operations with its excess cash. Bad debt expense will generally be higher.arrow_forwardHow will a firm's cash cycle be affected if one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, all else being equal (select the best choice below)? 1. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to decrease. II. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts receivable days will increase. All else equal, this will cause the cash cycle of the firm to increase. III. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will decrease. All else equal, this will cause the cash cycle of the firm to decrease. IV. If one of the firm's suppliers that was only accepting cash payment before, now offers a…arrow_forwardWhich of the following actions should Reece Windows take if it wants to reduce its cash conversion cycle? a. Take steps to reduce the DSO. b. Sell an issue of long-term bonds and use the proceeds to buy back some of its common stock. c. Increase average inventory without increasing sales. d. Sell common stock to retire long-term bonds. e. Start paying its bills sooner, which would reduce the average accounts payable but not affect sales.arrow_forward
- Marketers could suggest a number of situations that the company may consider investment in. O They could recommend new capacity expansion to satisfy potential new markets. OThey could recommend the purchase of a competitor to gain market share. They could recommend a change in the companies account receivable policy. O All of the above. OA, B but not Carrow_forwardWhich of the following statements is true? O As a general rule, management would want to reduce the firm's average collection period. O As a general rule, a firm is not financially affected by the amount of time required to collect its accounts receivable. O As a general rule, management would want to increase the firm's average collection period. O As a general rule, management would want to reduce the firm's accounts receivable turnover ratio.arrow_forwardWhen a company with rapid sales growth does not have sufficient funds to fund its growth, it can _______. Multiple Choice Be acquired by another company. Stop growing. Cause its debt to be recalled. Grow broke. Repurchase its shares.arrow_forward
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