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Kisachek [45]
3 years ago
10

ABC purchases inventory for $2,000 and incurs shipping costs of $100 for the goods to be delivered. To record this transaction,

the company debits Inventory for $2,000, debits Selling Expenses for $100, and credits Cash for $2,100. Which of the following statements is correct?
A) Revenues are understated.
B) All accounts are accurately stated.
C) Net income is overstated.
D) Assets are understated.
Specific Identification is used by:
A) Starbucks
B) Manufacturers
C) Grocery Stores
D) Car dealers
Business
1 answer:
Rus_ich [418]3 years ago
6 0

Answer: 1. D) Assets are understated

2. D) Car dealers

Explanation:

1. The shipping costs to bring Inventory into a business are known as Carriage Inwards. This amount is to be debited with the Inventory as it is considered to be part of the cost of acquiring the inventory. By not putting this cost with the inventory, ABC is undervaluing the inventory account which is an Asset account. The Assets are therefore understated.

2. The Specific Identification Method of inventory valuation is based on each individual unit purchased or sold. It does not group items and tracks each item from the moment it is purchased to the moment it is sold so the cost of the specific inventory is known. This method is used more often by businesses that deal with easily identifiable items such as Jewellers and Car dealers because each car is big enough to be tracked individually.

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3 years ago
What are long-term decisions that set the direction for the entire organization called?a. Tactical b. Operational c. Directional
kvv77 [185]

Answer:

The correct answer is letter "E": Strategic.

Explanation:

Strategic decisions imply analyzing what direction is the overall company going to take in the long run. It represents the groups of decisions high-rank executives must take to conduct the operations of the firm, the resources that will be used and how they will combine those factors to reach the organization's objectives.

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3 years ago
Delta Company purchased a delivery truck for a total cost of $15,000. Delta paid $2,000 in cash and signed a note payable for th
kupik [55]

Answer:

increase assets by $13,000, increase liabilities by $13,000 and have no effect on equity.

Explanation:

Given that

The total cost of purchase of delivery truck = $15,000

Cash paid = $2,000

The accounting equation equals to

Total assets = Total liabilities + owners equity

The remaining amount left would be equal to

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= $13,000

So it would increase the assets for $13,000 as the delivery truck is purchased plus there is also an increase in liabilities for $13,000 as it signed a note payable and there is no effect on equity

8 0
3 years ago
The IRS agent who audited the Form 1120 filed by Alano Inc. concluded that $300,000 of the salary that Alano paid to its CEO and
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Explanation:

Constructive dividends are paid to a shareholder and classified in such a way that they are not to be seen as taxable dividends.

If during auditing however, the IRS determines that it was indeed a taxable dividend, it becomes a constructive dividend.

Constructive dividends are taxable by definition so Alano's taxable income increases by the amount of dividend of $300,000.

7 0
2 years ago
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Management recreates a vital role in modern culture. It contains the factories of production for social progress, greater productivity, increased jobs and income, better performance, and the satisfaction of society's needs.

<h3>What do you think the managers of the future will be like?</h3>

Management plays an important part in setting the boundaries for what is sufficient ethically and legally. Future managers will be international strategists, right at technology, politicians, and good leader-motivators. . It enables the development of society and the welfare of the public. The future of management depends on flexibility, adaptation, and pragmatism.

To learn more about Management  visit the link

brainly.com/question/14523862

#SPJ4

5 0
2 years ago
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