Answer True or False. Briefly explain the false ones 36. Economic conditions hav

Question

Answer True or False. Briefly explain the false ones 36. Economic conditions have nothing to do with the strategies of working capital - "working capital management". 37. Annuities such as the IRAS accounts, they are an example of planning and financial control for retirement. 38. Decreases in assets are always sources of funds. 39. The issuance of capital shares is a source of funds for the issuer, just as it is a bond issue because it is long-term debt. 40. Accumulated depreciation is an asset that, when increasing is considered a use of funds

Explanation / Answer

Answer for question no.36.:

False. The working capital management strategies are directly related to the economic conditions. If the ecomonic condition is poor then the companies may prefer to adopt hedging stragegy

Answer for question no.37:

True. The contributions to the IRAs accounts is meant for earmarking funds to plan after retirement.

Answer for question no.38:

False, example copyrights amortization, if the balance in copyrights account decreases, it does not increase funds for the business. Hence, decrease in assets cannot always be considered as source of funds

Answer for question no.39:

False, Issuance of capital shares is not same as issuance of bonds, issuance of capital shares means capital and issuance of bonds means a long term debt. Issuance of bonds does not give right to vote but issuance oc capital shares give the right to vote. Capital shares are not debt, it is equity.

Answer for question no.40:

False.

Accumulated depreciation increases as every year depreciation is added to the accumulated depreciation account. it is not use of funds, it is an amortization of already incurred expense in the form of a depreciable asset.

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