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rosijanka [135]
3 years ago
14

Savor Co. had $100,000 in accrual basis pretax income for the year. At year-end, accounts receivable had increased by $10,000 an

d accounts payable had decreased by $6,000 from their prior year-end balances. Under the cash basis of accounting, what amount of pretax income should Savor report for the year?
a. $104,000b. $84,000c. $116,000d. $96,000
Business
1 answer:
Sladkaya [172]3 years ago
8 0

Answer:

B) $84,000

Explanation:

Since accounts receivable increased by $10,000, it means that the cash basis pretax income is $10,000 lower than the accrual basis pretax income. The company sold the goods or services but it hasn't received the cash them yet.  

Since accounts payable decreased by $6,000, it means that the cash basis pretax income is $6,000 lower than the accrual basis pretax income. The company acquired debt in year 1 but it paid it during year 2, therefore it used cash during year 2 to pay for debt that corresponded to year 1.

If we add both negative adjustments; (-$10,000) + (-$6,000) = -$16,000

$100,000 - $16,000 = $84,000

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The multiplier is greater than 1 because the change in autonomous expenditure leads to​ _______.
tangare [24]

Answer:

The correct answer is option B.

Explanation:

The multiplier shows the increase in total production due to change in expenditure.

The change in total expenditure is always greater than the change in expenditure.

This happens because a change in autonomous expenditure leads to grater change in the induced expenditure

Consequently, the value of multiplier is always greater than 1.

3 0
3 years ago
Samuel assists his clients in investing in the stock market. He not only acts as an agent by buying and selling corporate stocks
givi [52]

Answer:

Samuel plays the role of a securities broker.

Explanation:

A securities broker has the function of being the link between the investor and the global financial markets. The broker helps guide the client to make the best investment decisions in the market.

In addition to advising its clients, the securities broker is responsible for buying and selling the shares of its client. To be a securities broker, you must have higher studies in administration, economics, or finance, also have completed the preparation to work as a broker.

<em>I hope this information can help you.</em>

8 0
3 years ago
Complete the statements and then calculate the change in consumption. The consumption function shows the relationship between co
White raven [17]

Answer:

Disposible income.

Marginal propensity to consume.

Disposible income, marginal propensity to consume.

The consumption will increase by  $800

Explanation:

The consumption function shows the relationship between consumption spending and disposible income.

The slope of the consumption function is the marginal propensity to consume.

Changes in consumption can be predicted by multiplying the change in disposible income by the marginal propensity to consume.

Given:  MPC = 0.80

           Disposible income increases by $1,000

consumption increase =  0.80*$1000

                                     = $800

Therefore, The consumption will increase by  $800.

7 0
3 years ago
In the promotion element of the marketing mix, there are four main areas. Personal selling is direct spoken communication betwee
MAVERICK [17]

Answer: advertising, publicity, and personal selling- that stimulates interest, trail or purchase by final customers or others in the channel.

Explanation: Sales promotion are promotional activities used to stimulate consumers into purchasing a certain product. Sales promotion usually takes the form of giving discounted prices to customers, giving out extra incentive or gift items, freebies, voucher cards, coupon and other promotional offers which gives consumers extra material benefit when they purchase an item. Promotional offers are usually made during certain periods such as festive seasons, company anniversary or occasionally in other to drive sales or to wow customers.

7 0
3 years ago
Read 2 more answers
The cash basis method of accounting requires revenue to be recognized when performance obligations are satisfied. (If false, ide
xxTIMURxx [149]

Answer:

True

Explanation:

Unlike Accrual basis accounting the cash basis method of accounting requires revenue to be recognized when performance obligations are settled rather than when they are incurred.

The major difference between cash and accrual accounting is in the timing of when transactions are taken account of. Whereas Accrual accounting recognizes transactions when they occur (i.e. expenses when they are incurred and revenue when they are earned) Cash accounting recognizes revenue and expenses only when cash is paid.

6 0
2 years ago
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