Recognizing something as a revenue instead of as a liability has a positive effect on the reported financial statements because:

Business

1 answer:

Pani-rosa [81]2 years ago

4 0

Revenue and liability has influence on reported financial statements because;

it understates liabilities
it overstates revenues

<h3>What is revenue and liability?</h3>

Revenue serves as the money that is been generated by the company as a profit while a liability serves as future sacrifices of economic benefits.

However, recognizing something as revenue instead of liability is dangerous because it can results in overstated net income.

Learn more about revenue at;

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Answer:

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3 years ago

Explain the equation for the income statement. What are the three major items reported on the income statement?

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The equation for the income statement is Revenues - Cost of goods = Net income. The three major items reported on the income statement are net income, gross profits, and operating income.

The income statement is a statement of the profits and losses of a firm. It consists of three income statements. The Net income is derived by deducting the expenses of the firm from its revenues (Net income = Revenue - Expenses). It may also be calculated by adding the operating income with the non-operating items.

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1 year ago

Mariano Manufacturing can issue a 25-year, 8.8% annual payment bond at par. Its investment bankers also stated that the company

aivan3 [116]

Answer: 10.13%

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The after-tax return on the preferred shares would be:

= After-tax return + Premium required

= (8.8% * (1 - 25%)) + 1%

= 7.6%