Answer: :a. Retrospectively
Explanation:
A change in depreciation method is a change in accounting policy and as such it would need to be accounted for retrospectively.
This means that it must be accounted for by going back to all periods where the change affects an entry and adjusting that entry for the change so that the accounting can be more accurate.
Payroll records would most likely to keep in a database. It keeps it more safer for the future use.
Answer:
Balance sheet
Inventory - Understatement by $11,600
Owners equity - Understatement by $11,600
Income statement
Cost of goods sold - Overstatement by $11,600
Net income - Understatement by $11,600
Explanation:
The movement in an inventory account which is the difference between the opening and ending balances is a function of the purchases and the sales during the period.
This is captured in the equation below
Opening balance + purchases - cost of goods sold = ending balance
Hence an understatement of the ending balance would result in an overstatement of the cost of goods sold thus an understatement of the net income (and owner's equity).
The understatement in closing inventory balance is
= $378,500 - $366,900
= $11,600.
The sustainable growth rate (sgr) is 8 percent.
<h3><u>
What is Sustainable growth rate?</u></h3>
- The highest rate of growth that a business or social enterprise may sustain without using more equity or debt to fund expansion is known as the sustainable growth rate (SGR).
- In other words, it is the rate at which the business may expand without borrowing money from other sources by using only its own internal earnings.
- The SGR aims to increase sales and revenue while reducing financial leverage.
A corporation can avoid financial trouble and excessive leverage by achieving the SGR. Get or compute the company's return on equity (ROE) first. By comparing net income to shareholders' equity, ROE assesses a company's profitability.
Know more about sustainable growth rate with the help of the given link:
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