When sales increase by 13%, which of the following should also increase by 13% in a merchandizing company? (You may select more
than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Variable cost Fixed cost Gross margin Contribution margin Net operating income (e) When sales increase by 13%, which of the following should increase by more than 13% in a merchandizing company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Variable cost Fixed cost Gross margin Contribution margin Net operating income
1 answer:
You might be interested in
Answer:
a. Debit to Prepaid Insurance of $10,000
* Option for this question was missing so I have attached a similar question with this answer and answered accordingly.
Explanation:
Insurance purchased for four years was actually prepaid insurance on May 1, Year 2.
The company expensed all amount by positing following entry ( which is a wrong entry)
DR. Insurance Expense $12,000
Cr. Cash $12,000
It should be entered as follow:
DR. Prepaid Insurance $12,000
Cr. Cash $12,000
At the end of the year 2 8 months has been passed for which $2,000 is accrued and it will be recorded, as all the amount is charged to the expense account we will adjusted the remaining amount of $10,000 to correct this mistake.
Now at the end of year 2 the correct entry which will settle the expense and prepaid insurance as well is as follow.
DR. Prepaid Insurance $10,000
Cr. Insurance Expense $10,000
