19 A bank will only continue a credit line for one of its small business customers if the small business can keep an acid-test greater than 1. The company's reported current accounts are as follows: • Cash: $6,000 • Accounts receivable (net): $19,000 Inventory: $8,000 Short-term investment: $4,500 Current liabilities: $17,000 Which decision should the bank make? O Maintain the credit line because the acid-test ratio is 2.21. Close the credit line because the acid-test ratio is 0.45. O Close the credit line because the acid-test ratio is 0.58. Maintain the credit line because the acid-test ratio is 1.74. NEXT > BOOKMARK

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thempt 1 You just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all exces reserves and there are no leaks in the banking system. That is, all money lent by banks gets deposited in the banking system. Round your answers to the nearest dollar. If the reserve requirement is 12%, how much will your deposit increase the total value of checkable bank deposits? 0.14 Incamect If the reserve requirement is 4%, how much will your deposit increase the total value of checkable deposits? 0.04 $. Inomect Increasing the reserve requirement increases. the Incorect money supply.

Current Attempt in Progress         Bramble Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations.The balance per the bank statement on October 31, 2020, was $17,820. Outstanding checks were No. 62 for $150.10, No. 183 for $186, No. 284 for $267.75, No. 862 for $200.70, No. 863 for $232.00, and No. 864 for $177.10. Included with the statement was a credit memorandum of $179.80 indicating the collection of a note receivable for Daisey Company by the bank on October 25. This memorandum has not been recorded by Daisey.The company’s ledger showed one Cash account with a balance of $21,870.00. The balance included undeposited cash on hand. Because of the lack…

Which of the following statements about the company's financial operations and financial decisions is FALSE? If your company overdraws its checking account, the Global Community Bank will automatically issue your company a 1-year loan in an amount sufficient to bring your ending cash balance up to zero. The interest rate charged on overdraft loans is always 2% above whatever interest rate your company would otherwise pay on a 1-year loan from the GCB (for example, if your company's B credit rating entitled your company to a 1-year loan carrying a 6.5% interest rate, then the interest rate on a 1-year overdraft loan would be 8.5%). If the company needs to secure additional capital, it can take out loans with 1-year, 5-year. and/or 10-year terms from the Global Community Bank and/or it can issue new shares of common stock. The company's banking arrangement with the Global Community Bank calls for the company to be paid interest on any positive cash balance in the company checking…

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11 When credit card sales occur, the seller may receive cash immediately, or within a few days, depending upon the specific credit card program being used. Group starts True or False

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SETUP FOR QUESTIONS 6: Titan Bank is a community bank and its balance sheet is reported below.[1] The "total equity/total asset ratio" is 9.91 percent ($11.00/S120.00) and is defined as the capital ratio. Assume bank regulators require the capital ratio to be at least 8.00 percent at all times. If the capital ratio falls below 8.00 percent, the bank regulators immediately shut down the bank and fire the managers. Thus, the capital ratio is very important to the managers who are constantly evaluating "what if" scenarios to make sure they are not shut down. Use Titan Bank's balance sheet to evaluate the two scenarios described below. Balance Sheet (as of 12/31/2020 and in millions) Assets Liabilities Assets have a duration of 4.00 years and a Liabilities have a duration of 1.00 years and a yield to maturity of 3.00%. yield to maturity of 6.00%. Total Assets $111.00 Total Liabilities $100.00 Equity Total Equity $11.00 Scenario 2: Federal Reserve actions force an immediate non-parallel…

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