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TiliK225 [7]
3 years ago
8

Lisa Smith decided to start her CPA practice as a professional​ corporation, Smith​ CPA, PC. The corporation purchased an office

building for​ $35,000. The real estate agent said the building was worth​ $50,000 in the current market. The corporation recorded the building as a​ $50,000 asset because Lisa believes that is the real value of the building. Which of the following concepts or principles of accounting is being​ violated? A) cost principle
B) economic entity assumption
C) monetary unit assumption
D) going concern assumption
Business
1 answer:
NeTakaya3 years ago
4 0

Answer:

A) cost principle

Explanation:

Cost Principle is a fundamental guideline in accounting. It states that assets should be recorded in it's cash amount or it's equivalent at the time of purchase. In this scenario, the corporation(Smith CPA, PC) ignored this fundamental principle and decided on a figure which didn't reflect the value paid for.

$35,000 is the cash value and should be recorded as the vlue of the building.  

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Reginald owns a grocery and his clerks are on strike. Reginald is trying to operate the store with the help of his manager, but
Nata [24]

Answer:

merge law and equity

Explanation:

In resolving labour related or welfare issues the best way to do so will be to hear the grievances of the striking workers and try to find an equitable solution to the situation.

However if all reasonable avenues have been pursued and they still don't want to comply, then legal measures can be taken to make them work.

In this scenario Reginald should call the striking workers and try to come to an equitable solution for the business and workers where there will be a win-win.

If this does not work he can use the law to compel them to comply.

7 0
3 years ago
In a negotiation, to allow for concessions, the expectations expressed in the seller team's opening position should be:
ser-zykov [4K]

In a negotiation, to allow for concessions, the expectations expressed in the seller team's opening position should be higher than its target position

Option B

<u>Explanation: </u>

Negotiation is a political dialogue that addresses a problem in a way acceptable to both sides. That group tries in a discussion to convince the other to adhere to its views. Both parties involved tend not to argue, rather seek to find some kind of agreement by mediation.

Talks require others, so that one side is always in the forefront of the talks. Nevertheless, even when the concession is marginal, the other should surrender.

Negotiation parties can differ. These may include negotiations between purchasers or even between the government of several or more nations, employers and future employees.

6 0
3 years ago
A manufacturer estimates that its product can be produced at a total cost of C(x) = 50,000 + 100x + x3 dollars. If the manufactu
timofeeve [1]

Answer:

The level of production x that will maximize the profit is: 22,966

Explanation:

C(x) = 50,000 + 100x + x³

R(x) = 3400x

P(x) = R(x) - C(x)

      = 3400x - [50,000 + 100x + x³]

      = 3400x - 50,000 - 100x - x³

      = 3300x - 50,000 - x³   .................... (A)

P'(x) = 3300(1) - 0 - 3x²

       = 3300 - 3x²

At a critical point, P'(x) = 0

∴   0 = 3300 - 3x²

  3x² = 3300

    x² = 1100

     x = ± \sqrt{1100}

P"(x) = -6x

P(\sqrt{1100}) = -6 (\sqrt{1100})   < 0

by second derivative, 'P' max at    x = \sqrt{1100} = 33.17 (rounds)

since x =  \sqrt{1100} ,

recall that P(x) = 3300x - 50,000 - x³ from equation (A)

Therefore, Maximum Profit

P(\sqrt{1100}) = 3300\sqrt{1100} - 50000 - \sqrt{1100} ^{3}

              = 3300(33.17) - 50,000 - 33.17³

              = 109461 -50,000 - 36495.26

              = 22,965.74

Maximum profit is 22,966 to the nearest whole number

5 0
3 years ago
Earl was known for driving 30 miles just to save a dollar on the price of case of his favorite carbonated beverage. Earl perceiv
Marianna [84]

Answer:

Money Paid

Overall Sacrifice

Explanation:

The two major dimensions of pricing are Monetary and Non- Monetary pricing.

Monetary pricing is the liquid asset like cash that is spent to acquire goods and services while the non monetary are other costs apart from money like time , stress , distance that it costs to acquire an item .

The individual perception of pricing has a way of affecting its choice when it comes to purchasing.

Earl did not consider the cost of stress in travelling 30 miles in order to save a $1 in his purchase decision as his mindset is programmed to the price paid being the real price  while most other customers considers the sacrifice involved before making a purchase decision.

3 0
3 years ago
The S&amp;P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. Consisting of 500 companie
seropon [69]

Answer:

1. Based on my understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher?

Th e correct option is (<em>b). The outlook for the economy and the markets is for improvement. </em>

2. You invest $100,000 in 40 stocks, 20 bonds, and a certificate of deposit (CD). What kind of risk will you primarily be exposed to?  

Th e correct option is <em>(b). Portfolio risk   </em>

3. Generally, investors would prefer to invest in assets that have:  

a. A higher-than-average expected rate of return given the perceived risk

Explanation:

1. Based on my understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher?

Th e correct option is (<em>b). The outlook for the economy and the markets is for improvement. If the outlook of the economy and the market prospects of the stocks are for improvements, it then means that the Price Per Earning of the stock will be increasing, which is a positive economic trend.</em>

<em>Moreover, since we are talking about the average P/E it can be inferred that in the very long run, average of the S&P 500 Price to Earnings (PE) ratio (since 1900) is approximately 15.8, and the ratio since 1946 (the post-World War II period) is 17.3, so, it is fair to call a "normal" PE ratio about 16.5, which is relatively stable over the years. </em>

 2. You invest $100,000 in 40 stocks, 20 bonds, and a certificate of deposit (CD). What kind of risk will you primarily be exposed to?  

Th e correct option is <em>(b). Portfolio risk  is the chance that the combination of assets or units, within the investments that you own, fail to meet financial objectives. Each investment within a portfolio carries its own risk, with higher potential return typically meaning higher risk. It can be computed as  the risk of the  two-securities portfolio, first take the square of the weight of  40 Stocks ($100,000.00)  and multiply it by square of standard deviation of  the 40 stocks. Repeat the calculation for 20 Bonds and a Certificate of Deposit.</em>

<em></em>

3. Generally, investors would prefer to invest in assets that have:  

a. A higher-than-average expected rate of return given the perceived risk <em>Yes they will because a higher -than average expected rate of return will inform the investor the type of strategies to adopt to guarantee the expected earnings containing the risk. </em>

<em></em>

5 0
3 years ago
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