a balance achieved between two desirable but incompatible features; a compromise.
"a trade-off between objectivity and relevance"
Answer:
A. Is self regulating
Explanation:
The fundamental theory of the classical economy is that the market economy is self regulating. The classical economists believe that an economy is always capable of achieving real GDP, that is GDP when resources are fully employed. And that, time to time, when GDP falls below or exceed the real GDP, the market economy has self-adjustment mechanisms to bring it back to the real GDP level. Classical economists believes in self regulating democracies and capitalistic market developments.
Answer:
In Barton and Barton Company's general journal, entry required include:
Debit Retained Earnings Account with $8.2 million
Credit Opening Inventory with $8.2 million
Being reversal of overstated inventory due to change from FIFO to Average cost method.
Explanation:
The debit entry to the Retained Earnings Account will reduce the balance by $8.2 million. The effect of overstating the closing inventory is overstatement of the net income because the cost of sales was understated as a result of the inventory overstatement.
The credit entry to the Opening Inventory reduces the balance to the new balance based on the average cost method of $23.8 million.
The FIFO cost method or First-In, First-Out method is an inventory costing method that assumes that goods that were bought first were the ones to be sold first. The inventory cost is therefore valued with the most recent quantity and cost price.
On the other hand, the Average Cost Method, also called the Weighted Average Cost Method, calculates the inventory cost by adding all the period's inventory and dividing it by the quantity for the period. This gives an average cost which is in turn used to multiply the quantity of inventory at the end of the period to obtain the inventory cost.
Both methods are estimates that produce different results and affect the reported net income differently. There is always the need for consistency in choosing the method to apply so that reported net income is not unduly distorted.
If you are planning to place an ad in a local newspaper with a size of 5 inches long by 4 columns wide and the newspaper's rate per column inch is $18, the ad will cost $360.
Solution: <span>5 inches x 4 columns = 20
20 column inch x $18 = $360</span>
Answer:
December 31 2014, cash = $486,000
Explanation:
To solve this, we will classify the particulars as either income or expenditure,and find the difference. This is shown below:
Particulars income($) expenditure($)
operating activities 531,000 -
investing activities - 963,000
financing activities 585,000 -
January 1 cash balance 333,000 -
Total 1,449,000 963,000
∴ net cash available on December 31 2014 = Total income - expenditure
= 1,449,000 - 963,000 = $486,000
