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Liono4ka [1.6K]
3 years ago
8

20. Otto's Tune-Up Shop follows the revenue recognition principle. Otto services a car on August 31. The customer picks up the v

ehicle on September 1 and mails the payment to Otto on September 5.Otto receives the check in the mail on September 6. When should Otto show that the revenue was recognized? A) August 31 B) August 1 C) September 5 mber
Business
2 answers:
ss7ja [257]3 years ago
5 0

Answer:

A) August 31

Explanation:

The revenue recognition principal states that a company should only recognize revenue when it has substantially completed the earning process. This earning process can be completed either before or after receiving the payment. If it is completed before receiving payment, an accounts receivable is created. But if the good or service was paid in advance, an accounts payable is created until the good or service is delivered or completed.

In this case, Otto completed the earning process either August 31 or September 1, it is not clear when the car service was completed, but since September 1 is not an option, then the only possible option is August 31.

Allushta [10]3 years ago
4 0

Answer:

Option A-The revenue must be recognized on 31 August.

Explanation:

The accrual concept says that the income must be recognized when they are earned not when the amount is received and expenses when they are incurred not when they are paid.

So according to accrual concept, the entity must deliver its share to recognize sales that is servicing the car. When the entity will service the car then it should recognize the revenue otherwise not. So in accrual basis accounting the date of payment is irrelevant for recognition of revenue and expenses.

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Brandy and Teri are competitors in the bakery business in a small wealthy upscale resort town. Brandy recently negotiated a cont
Flauer [41]

Answer:

b. False

Explanation:

In a competitive environment, pricing strategy is one of the strategies to ensure efficiency and profitability. But lowering of prices at the expense of deterioration in the quality of product offerings cannot be a recommended strategy.

The four competitive strategies specified by Michael Porter are namely, Cost Leadership, Differentiation, Cost Focus and Differentiation focus.

Under Cost leadership, a firm strives to offer it's products at the lowest cost and be the cost leader in an industry.

Differentiation refers to adding unique attributes and values to the products which differentiates such products from those of the competitors.

Cost focus refers to cost leadership when targeted at a particular marketing segment and similarly, differentiation focus is differentiation when applied to a specific marketing segment.

A firm cannot focus at price at the expense of quality of it's offerings. Thus, keeping prices down isn't all which matters.

4 0
3 years ago
An ad for Maybelline age-minimizing makeup in Ladies' Home Journal magazine featured actress Gigi Hadid and offered readers a $2
marysya [2.9K]

Answer:

Home Journal magazine

Explanation:

In communication, medium is what the message is conveyed on. It is the system or channel through which a message is transmitted from the sender to the recipient. The modern medium used in advertising is in the electronic format and includes the internet, telephone, and other electronic devices.

Tradition medium channels are television, radio, and print media such as newspapers and magazines.  The ad for Maybelline age-minimizing appears in a magazine. The  Ladies' Home Journal magazine is the medium for the ad.

6 0
4 years ago
Read 2 more answers
Park Place Company reported cost of goods sold of $140,000 for the year 2020. Park Place also reported the following amounts on
Paul [167]

Answer:

the cash paid to supplier is $143,000

Explanation:

The computation of the cash paid to the supplier is given below;

Purchases = Ending inventory + cost of goods sold - beginning inventory

= $27,500 + $140,000 - $25,000

= $142,500

Now the Cash paid to supplier is

= Beginning account payable + purchases - ending account payable

= $15,000 + $142,500 - $14,500

= $143,000

hence the cash paid to supplier is $143,000

6 0
2 years ago
Your cell phone plan costs ​$34.99 per month plus ​$0.14 for each text message you send or receive. You have at most ​$38 to spe
amm1812
21.5, so maximum 21 text messages
4 0
3 years ago
Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for
Fittoniya [83]

Answer:

$174,781.20

Explanation:

I will do the calculations in 3 stages. You won`t go wrong if you follow these.

  1. Equivalent Units
  2. Total Unit Cost
  3. Total Cost to be transferred to next department

<u>Calculation of Equivalent Units of Production with respect to Raw Materials and Conversion Costs</u>

1. Raw Materials

Ending Work In Process Inventory (2,300 × 70 %)                          =  1,610

Completed and Transferred to Finished Goods (6,600 × 100%)   = 6,600

Equivalent Units of Production with respect to Raw Materials       = 8,210

2. Conversion Costs

Ending Work In Process Inventory (2,300 × 55 %)                           = 1,265

Completed and Transferred to Finished Goods (6,600 × 100%)    = 6,600

Equivalent Units of Production with respect to Conversion Costs = 7,865

<u>Calculation of Total Unit Cost of Production with respect to Raw Materials and Conversion Costs.</u>

Unit Cost = Total Cost (Beginning + Current) ÷ Total Equivalent Units

1. Materials

Unit Cost = ( $ 7,900 + $ 111,000) ÷ 8,210

                = $14.482 (3 decimal places)

2. Conversion Cost

Unit Cost = ( $ 3,200 + $ 84,100) ÷ 7,865

                = $12.00 (3 decimal places)

3. Total Unit Cost

Total Unit Cost = Materials + Conversion Costs

                         = $14.482 + $12.00

                         = $ 26.482

<u>Calculation of total cost of units completed and transferred from the first processing department to the next processing department</u>

Total Cost = Units Completed and Transferred × Total Unit Cost

                 = 6,600 × $ 26.482

                 = $174,781.20

8 0
3 years ago
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