How are contingent liabilities reflected on a balance sheet

June 30, 2024 No Comments

A: Contingent liabilities need to pass two thresholds before they can be reported in the financial statements. First, it must be possible to estimate the value of the contingent liability. If the value can be estimated, the liability must have a greater than 50% chance

How are current and noncurrent assets different?

June 30, 2024 No Comments

A: Assets can be divided into two categories: current and noncurrent. Current assets are items listed on a company’s balance sheet that are expected to be converted into cash within one fiscal year. Conversely, noncurrent assets are long-term assets that a company expects to hold over one

How are EBIT and operating income different?

June 30, 2024 No Comments

A: EBIT (earnings before interest and taxes) is a company’s net income before interest expense, and income tax expense have been deducted. EBIT is often considered synonymous with operating income, although there are exceptions. Investors and creditors use EBIT to analyze the performance of a company’s core operations

Are qualified dividends included in ordinary dividends?

June 30, 2024 No Comments

A: Qualified dividends are included with ordinary dividends in box 1a of the Internal Revenue Service Form 1099-DIV; the box includes all ordinary dividends earned from a particular stock. Box 1b shows the number of the dividends in box 1a that are qualified dividends. The

Can a stock have a negative price-to-earnings (P/E) ratio?

June 30, 2024 No Comments

A: Yes, a stock can have a negative price-to-earnings ratio (P/E), but it is very unlikely that you will ever see it reported. Although negative P/E ratios are mathematically possible, they generally aren’t accepted in the financial community and are considered to be invalid or

Can I have more than three original Bills of Lading?

June 30, 2024 No Comments

A: There is no restriction on the number of bills of lading that can be issued, but the number issued must be stated on the bill. Three bills are standard – one for the shipper, one for the consignee, and one for the banker, broker

A hypothecation agreement allows a broker-dealer to

June 30, 2024 No Comments

A: A. approve the client for “hot” IPOs. B. hold the margined securities in a street name loan – using the securities as collateral for other means (i.e. bank loans and short sales of other customers). C. hold margined securities in mutual fund accounts and

Are depreciation and amortization included in gross profit?

June 30, 2024 No Comments

A: Gross profit is the revenue earned by a company after deducting the direct costs of producing its products. For example, if it costs $15,000 to produce a car, and the car sells for $20,000, the difference of $5,000 is the gross profit on that one car. Gross profit, sometimes referred to as

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