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Roman55 [17]
3 years ago
7

he ABC Company operates a catering service specializing in business luncheons for large corporations. ABC requires customers to

place their orders 2 weeks in advance of the scheduled events. ABC bills its customers on the tenth day of the month following the date of service and requires that payment be made within 30 days of the billing date. Collections from customers have never been an issue in the past. ABC should recognize revenue from its catering services at the date when a
Business
1 answer:
gizmo_the_mogwai [7]3 years ago
8 0

Answer: b. Luncheon is served.

Explanation:

The Accrual Basis in Accounting requires that Revenues are recorded when they are earned as well as Expenses being recorded when incurred. Revenue is not to be recorded when the services have been paid for when when an order has been made. They are to be recorded when the service has been fulfilled or the goods delivered.

In the above case, ABC is a caterer and their main business is to serve business luncheons for large corporations.

This means that their service is done when they serve these luncheons. This should be when the revenue should be recognized then because this is when their service was delivered.

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mihalych1998 [28]

Answer:

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Explanation:

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8 0
2 years ago
In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. They share income in a 3:2:1 ra
uysha [10]

Answer:

C. Stella, Capital will be debited for $4,000.

Explanation:

As for the provided information, we have,

Out of all the partner's Tiffany is retiring.

Tiffany's capital balance = $50,000

On his retirement he is paid $60,000

Since no goodwill is recorded, the excess amount paid over capital = $60,000 - $50,000 = $10,000, will be debited in remaining partner's ratio.

Ron's share in these $10,000 = $10,000 \times 3/(3+2) = $6,000

Stella's share = $10,000 \times 2/(2+3) = $4,000

Thus, Correct answer is debiting Ron's capital by $6,000 and Stella's capital by $4,000

3 0
3 years ago
Alonso, the union steward at Selzar Inc., is attempting to persuade members of management to make certain revisions to the compa
UkoKoshka [18]

Answer:

C. negotiating contracts

Explanation:

Discussing and Compromising on contract term in order to reach out final agreement between the company management and union at Selzar Inc.

6 0
3 years ago
Bob consumes food and housing. Suppose his marginal utility from an additional unit of food is 20 and his marginal utility from
lozanna [386]

Answer:

Option (E) is correct.

Explanation:

For utility maximization,

Bob's consumption of Housing and food should be such that:

\frac{Marginal\ utility\ of\ housing}{Price\ of\ housing}=\frac{Marginal\ utility\ of\ food}{Price\ of\ food}

Here,

\frac{Marginal\ utility\ of\ housing}{Price\ of\ housing}=\frac{100}{2}

                                                                                              = 50

\frac{Marginal\ utility\ of\ food}{Price\ of\ food}=\frac{20}{1}

                                                                                   =20

Bob is not maximizing utility, as these two terms are not equal(50 > 20).

Since the marginal utility per rupee spent on housing is greater than that on food.

Hence, Bob can increase his utility just by consuming more of housing and less of food.

7 0
2 years ago
David Rose Inc. forecasts a capital budget of $500,000 next year with forecasted net income of $400,000. The company wants to ma
spayn [35]

Answer:

If the company follows the residual dividend policy, it is $50,000 in dividends.

Explanation:

Dividend is calculated by using the formula:

Dividends = Net Income - Equity requirement

where, Equity requirement = Capital budget  (% Equity)

                                             = 500,000(70%)  = $350,000

∴ Dividends = 400,000 - 350,000

                    = <u>$50,000 </u>

7 0
3 years ago
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