Answer: Comparability
Explanation: Financial statements of an organisation indicates the position of the business on the market and what are its future prospects. Thus, every organisation markets have to follow same accounting principles while preparing financial statements so that investors in the market could compare different alternatives.
Hence the given statement is an example of comparability.
Explanation:
The journal entry is shown below:
Contract price Dr $500,000
Cost of construction $1.5 million
To Revenue $2 million
(Being the revenue for the year 1 is recorded)
For recording this transaction we debited the contract price and cont of construction while credited the revenues account so that the proper posting could be done
Answer:
c. is the process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities
Explanation :
Strategic planning is an organizational process of defining its strategy, or direction in accordance with the businesses objectives and making decisions on allocating its resources to accomplish this strategy.
Answer:
Chen should buy the machine
Explanation:
Buying of the new milling machine would make a business sense if the net present value of the new machine is positive.
By net present value I mean if the today's worth of the asset considering its initial cash outflow and subsequent cash inflows bring about a positive worth today.
Net present value=initial cost-cash inflows(discounted to today's terms)
Net present value=-$40,000+($8000*6.4177)
=-$40,000+51341.6
=$11,341.60
The 6.4177 is the annuity factor for 9% cost of capital for 10 years.
Since the project has a positive net present value,Chen should buy the machine
