
Ask Joey ™ a Question
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What is a rubber check?
What does rubber do? It bounces. A rubber check is a check that bounces. When a check bounces, it means that the person that wrote the check doesn’t have enough funds in their account. For example, if you wrote a check for $100, but only had $90 in your checking account, the check would bounce.
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What is boot strapping?
Boot strapping is most commonly associated with a start-up company. It basically means that the founders had to use their own cash or personal credit cards to finance the early days of the company. The alternative to boot strapping is to obtain funding from external investors. The reason a company’s founders would choose to bootstrap […]
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What is “tone at the top”?
Tone at the top is another phrase for the control environment, which is one of the key components of the COSO internal control framework. The phrase “tone at the top” basically helps define or assess management’s leadership and commitment to creating a culture in the organization that is focused on honesty, integrity, and ethical behavior. […]
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What is accounts payable (AP)?
First, accounts payable is often referred to as “AP! Accounts payable is one of the main current liability accounts on a company’s balance sheet. AP represents amounts that the company owes to supplier or vendors, and those amounts must be paid within the next 12 months (i.e. that is why they are current). For example, […]
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What does the slang term “suicide pill” mean in finance?
If a company is on the verge of being acquired by another company, and they don’t want to be acquired, then they might take a suicide pill. There is no concrete way to commit financial suicide. Basically, any extreme action by the company to prevent being acquired would be considered financial suicide. Examples include taking […]
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What is the personal holding company tax?
Personal holding companies that are required to pay personal holding tax will be subject to an additional 20% tax on personal holding income. Personal holding corporations will be subject to a penalty tax if they meet certain criteria: Criteria #1: Over 50% of the value of the outstanding stock should be owned by five or […]
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How to calculate the accumulated earnings tax for corporations?
The accumulated earnings tax is a 20% tax that will be applied to C corporation’s taxable income. The accumulated earnings tax is considered a penalty tax to those C corporations that have accumulated over $250,000 in earnings ($150,000 for PSC corporations) and if that excess amount has not been distributed to shareholders in the form […]
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What tax credits can C Corporations claim?
Corporations are entitled to lower their ordinary tax liability by applying the minimum tax credit (MTC). C corporations will be subject to fewer tax credits than individuals but will be allowed four primary direct reductions to their corporate tax liability. C corporations will be allowed to take the R&D credit, general business credit, and foreign […]
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