Why do you need a margin account to short sell stocks?

July 9, 2024 No Comments

A: The reason that margin accounts and only margin accounts can be used to short sell stocks has to do with Regulation T, a rule instituted by the Federal Reserve Board. This rule is motivated by the nature of the short sale transaction itself and

Why does accumulated depreciation have a credit balance on the balance sheet?

July 9, 2024 No Comments

A: Accumulated depreciation is increased with a credit entry, although it is shown on the asset side of the balance sheet. Following the accounting equation, which is the basis for a balance sheet, assets must always be equal to liabilities plus equity. Assets, on the

Why is Average Collection Period important to a company?

June 30, 2024 No Comments

A: An average collection period shows the average number of days necessary to convert business receivables into cash. The degree to which this is useful for a business depends on the business’s relative reliance on credit sales to generate revenue; a high balance in accounts

Why is Average Collection Period important to a company?

July 7, 2024 No Comments

Why is Average Collection Period important to a company?

July 9, 2024 No Comments

Why is deferred revenue listed as a liability on the balance sheet?

June 30, 2024 No Comments

A: Deferred revenue, which is also referred to as unearned revenue, is listed as a liability on the balance sheet, because under accrual accounting, the revenue recognition process has not been completed, and the company’s product or service is still due to the buyer. When

Why is deferred revenue listed as a liability on the balance sheet?

July 7, 2024 No Comments

Why is deferred revenue listed as a liability on the balance sheet?

July 9, 2024 No Comments

Why is EBITDA commonly used as a valuation metric for telecommunications companies?

June 30, 2024 No Comments

A: Earnings before interest, taxes, depreciation and amortization, or EBITDA, is a popular equity evaluation metric for analyzing companies in the telecommunications sector mainly because of what the metric excludes, such as depreciation. The Nature of the Telecommunications Sector To understand the usefulness of EBITDA

Why is EBITDA commonly used as a valuation metric for telecommunications companies?

July 7, 2024 No Comments

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