Answer: b. debenture bonds.
Explanation:
A debenture bond is a debt instrument that is unsecured by a collateral or asset. They are issued by companies to raise capital.
A callable bond is a bond that can be redeemed before its maturity date.
A junk bond is a very risky bond with low credit ratings but pay a higher yield when compared to better rated bonds.
Indebenture bond is a legal document that describes the features and terms of a bond.
Answer:
Prepare the journal entries for above accounts
Explanation:
1. Cash Dr.147,000
Sales Discount Dr.1,314
A/R Cr.148,314
2. Account Receivable Dr.5,620
Disallowance for Bad debts Cr.5,620
3. Allowance for Doubtful Accounts Dr.26,900
Account Receivable Cr.26,900
4. Bad Debts Expense Dr.26,900
Allowance for Doubtful Accounts Cr.26,900
Answer:
c. No, you would not raise the price
Explanation:
A perfectly competitive market form is the one which is characterized by following features:
- Large number of buyers and sellers: The number of buyers and sellers is so large that output by an individual seller forms insignificant portion of the industry output, and thus an individual firm cannot exert perceptible influence on the prices or output.
- Homogeneous Products: Firms in such a market produce same and exactly similar products in terms of color, size, weight, etc.
- Freedom of entry and exit: There exist no entry barriers while loss making firms can leave the industry as well.
- Price taker: Price in such a market form is determined by interaction of market forces of demand and supply and each firm accepts such price. Thus firms are price takers.
In the given case, since all seller firms are producing exactly same products, if one raises the price, the buyers will switch to products of other sellers, providing same product at a lower price. Thus, all sales would be lost in such a scenario.
So, one cannot raise price even by a cent in a perfectly competitive market form.
