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andrey2020 [161]
2 years ago
15

Which are 3 common misconceptions users of an income statement may have?

Business
1 answer:
Mama L [17]2 years ago
3 0

The three most frequent misconceptions are that net income equals cash, net income excludes estimates, and net income reports all changes in value that occurred during the accounting period.

One of the three crucial financial statements used to describe a company's financial performance throughout a certain accounting period is the income statement. The balance sheet and the cash flow statement are the other two important statements. The income statement, which is often referred to as the profit and loss (P&L) statement or the statement of revenue and expense, primarily focuses on the company's revenue and expenses over a specific time period. Understanding how to study an income statement is the greatest approach to evaluate a business and choose whether or not to invest.

To learn more about income statement here

brainly.com/question/28035395

#SPJ4

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Suppose the National Bureau of Economic Research (NBER) comes out with a report suggesting that the economy will soon dip into r
sweet [91]

Answer:

(D) The cyclical unemployment

Explanation:

Business activity is subject to the comings and goings of private initiative, so the expansion and recession phases of the economy affect the number of unemployed.

<u>Cyclical unemployment</u> increases considerably during times of recession, due to the deterioration of economic conditions; while decreasing in the stages of expansion, due to the improvement of the economy.

Governments try to reduce the incidence of this type of unemployment by softening the transition between different economic cycles. The objective is that the labor supply does not vary significantly between the stages of expansion and recession so that its demand is not excessively impaired.

3 0
3 years ago
Explain the difference between the proportional method and the incremental method of allocating the proceeds of lump-sum sales o
LenaWriter [7]

Answer:

When a company sells different securities together (this usually happens during mergers and acquisitions):

  1. and the price of all the securities is not certain, the incremental method will first allocate proceeds to the sale of securities whose price is actually certain. The remaining proceeds will be allocated to the securities whose price is uncertain. E.g. total sales $10 million, stocks worth $5 million were sold and bonds worth ? million were sold. The company will allocate $5 million to stocks and $5 million to bonds.
  2. and the price of all the securities is certain, the proportional method allocates the sales proceeds proportionally among the different securities sold. E.g. total sales $10 million, stocks worth $5 million were sold and bonds worth $3 million were sold. The company will allocate ($5/$8) x $10 million = $6.25 million to stocks and $3.75 to bonds.

6 0
2 years ago
"The time horizon to be used when constructing a portfolio to pay for college expenses for a person who is expected to start col
Karolina [17]

Answer:

15 years

Explanation:

If you are constructing a portfolio to cover the education expenses of your child and you expect that he/she graduates from college in 15 years, then the time horizon of your portfolio should be 15 years since it should cover all the expenses until your child graduates. If you start a little earlier and expect your child to graduate in 20 years, the time horizon will be 20 years, or if you start a little later and expect your child to graduate in 10 year, then the time horizon is 10 years.

7 0
2 years ago
In 2016, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. T
Aleksandr-060686 [28]

Answer:

1500

Explanation:

Breakeven point is the number of units produced and sold where net income is art on it is where revenue equals cost.

The formula for calculating break even points = F / (P - V)

F = fixed cost

P = price

V = variable cost per unit

$270,000 / ($600 - $420) = 1500

I hope my answer helps you

6 0
3 years ago
On May 7, Jernigan Company purchased on account 640 units of raw materials at $15 per unit. During May, raw materials were requi
Tema [17]

Answer:

Date               Account Title                                              Debit               Credit

May 7             Materials                                                 $9,600

                      Accounts Payable                                                            $9,600

<u>Working:</u>

= Units purchased * cost per unit

= 640 * 15

= $9,600

As the goods were purchased on account, they will be sent to accounts payable. Materials are assets so they will be debited when acquired.

3 0
3 years ago
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