Machinery repairs, property taxes, salaries for workers variable: number of workers, what crop is being produced, gas for machinery.
Answer:
1. Going concern
2. Economic entity
3. Monetary unit
4. Periodicitys
Explanation:
1. Since Jumbo's Restaurant is planning to close, the assumption of continuity (going concern) is no more applicable. This should be disclosed. Instead asset was still recorded at historical price which is misleading.
2. Gorloks Tax Services is an economic entity, and the property and assets of owners are not considered to be for the business. In this case the boat Sam bought was wrongly reported as an asset of the company.
3. Claim Jumpers when reporting the 5 trucks purchased must include a monetary value for them. The assumption of monetary unit states that all items reported on the balance sheet must be expressed in monetary terms.
4. Cobbler's Etc violated the assumption of periodicity which states the financial position of the business must be declared in a particular accounting period. Accounting period can monthly, quarterly, biannually, and yearly. The business should choose and accounting period and ensure financial position is reported for each of them. In this case financial reporting is not consistent with reporting happening after 14 months and before that 18 months.
Answer: Option (C) is correct.
Explanation:
The required reserves are the reserves that banks have to keep it with central bank. Required reserves are the fraction of Check-able deposits. The required reserves are determined by multiplying the deposited amount with the required reserve ratio.
Required reserves = Deposited amount × Required reserve ratio
Required reserve ratio is set by the central bank.
