Answer: True
Explanation: Departmentalization is a process of grouping an entities activities into units. These units take charge of different work process and the working together of each units aids the organisation to achieve its goals.
Reality test of a business plan involves proving that a market for the product or service really does exist and that the company can produce the product or provide the service at a reasonable cost.
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An entrepreneur must be successful in the business he starts as he takes ;lot of risks with that. It is very essential for an entrepreneur to create a business plan before taking any forward steps in the business. Performing the reality check will help an entrepreneur to ensure that he is in the right track of the business.
In the reality check, an entrepreneur gets to know about the viability of the market, his own strength and weakness and the financial position for the production of the products. It helps an entrepreneur to know about the demands that exists for his product and how can he produce those products or services as reasonable cost.
Answer:
$149,000
Explanation:
The computation of the amount of net sales is shown below:
= Sales revenue - sales return & allowance - sales discount
= $156,000 - $2,000 - $5,000
= $149,000
We simply deduct the two items from the sales revenue so that the net sales revenue could be come and the same would be reported on the income statement
Answer:
(a)
Dr. Cash $2,630,000
Cr. Preferred Stock $2,147,000
Cr. Add-in-Capital excess of par preferred stock $483,000
Explanation:
Preferred stockholders has an advantage that they are paid first when there is any dividend is announced. The residual dividend will be divided into the common stockholders. Any prior years due dividend and current years dividend associated with preferred share will be paid first.
Par value = 113,000 x 19 = $2,147,000
Excess of par value = $2,630,000 - $2,147,000 = $483,000
Answer:
The survival principle states that
A. the only firms that survive are those that maximize profits.
Explanation:
Profit maximization is important for a firm to survive. Without profit maximization, firms fail. Profits impact share price, business growth, and short-term and long-term survival. Profits reduce debt burden, and increase capital investments and acquisitions. Without profits, a firm cannot pay dividends or repurchase shares. Profit is at the center of a firm's survival. Even Baumol's theory of sales maximization states that it is only when an acceptable level of profit has been achieved that a firm can shift its focus away from profits to revenue maximization. This emphasizes the importance of profit maximization. Profit maximization also contributes to the maximization of cash flows.