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Tom [10]
3 years ago
14

A company's financial statements may contain errors even if debits and credit balance because:

Business
1 answer:
emmasim [6.3K]3 years ago
6 0

Answer:

B. correct but equal amounts may have been posted to wrong accounts

Explanation:

It is possible that in the presence of the errors the debits and credits side remains balance.

Following errors may balance the debits and credits

  • Error of omission ( Transaction is totally omitted)
  • Error of commission (posting in wrong accounts by same value)
  • Error of Principle (Entry made against the principle of accounting)
  • Error of Original Entry (Wrong amount posted on both debit and credit sides)
  • Compensating error (Two errors compensate each others effect)

All of the above errors may present in case of balanced debit and credit sides.

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Aurora Corporation operated without insurance coverage for the first month of 2019. Then, on February 1, 2019, the company paid
Genrish500 [490]

Answer:

Correct answer is letter B, $2,200

Explanation:

Using accrual basis method, revenue and expenses will be recognized when incurred.

The $4,800 is a 24 months policy, therefore we must compute the insurance expense applicable for the year covering from February 1 to December 31 (11 months)

An adjusting entry to recognize the expire portion of the insurance must be done at the year end in the amount of $2,200.

($4,800 / 24 months = $200 x 11 months = $2,200)

3 0
3 years ago
A firm has an equity beta of 1.2, the risk-free rate is 3.4 percent, the market return is 15.7 percent, and the pretax cost of d
Alik [6]

Answer:

0.82

Explanation:

Calculation to determine the firm's asset beta

Using this formula

Firm's asset beta=Equity beta/(1+/D/E)

Let plug in the formula

Firm's asset beta=1.2/(1+0.47)

Firm's asset beta=1.2/1.47

Firm's asset beta=0.816

Firm's asset beta=0.82 (Approximately)

Therefore the firm's asset beta is 0.82

5 0
3 years ago
Scoresby Co. uses 3 machine hours and 1 direct labor hour to produce Product X. It uses 4 machine hours and 8 direct labor hours
beks73 [17]

Answer:

(C) Product X = $880; Product Y = $2,240

Explanation:

The applied overhead will be calculate by the product of the cost diver and the overhead rate:

<u>Cost driver for each product:</u>

Product X   3MH and  1LH

Product Y   4MH and 8LH

<u />

<u>Overhead rate: </u>

240 per machine hour

and 160 per labor hour

Product X   3MH x $240 +  1LH x $160   = 880

Product Y   4MH x $240 +  8LH x $160  = 2,240

4 0
2 years ago
What is the present value of $2,025 per year, at a discount rate of 7 percent, if the first payment is received 6 years from now
Marysya12 [62]

Answer:

The correct answer is $20,369.65.

Explanation:

According to the scenario, the computation of the given data are as follows:

Payment (pmt) = $2,025

Discount rate ( rate) = 7%

Time period ( Nper) ( 6 -23 years) = 18 years

So, we can calculate the Present value by using financial calculator.

Attachment is attached below.

So, Present Value = $20,369.65

7 0
3 years ago
Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5 kilograms of the raw material Jurislo
Vladimir79 [104]

Answer:

Cost of purchase= $1,014,300

Explanation:

Giving the following formula:

Production:

August= 22,600

September= 21,300

Ending inventory= 20% of the following month's production needs.

Beginning inventory= 10,800 kg

The cost of Jurislon is $18.00 per kilogram.

One Miniwarp requires 2.5 kilograms of the raw material Jurislon.

<u>First, we need to calculate the purchases in kg required using the following formula:</u>

Purchases= production + desired ending inventory - beginning inventory

Purchases= (2.5*22,600) + (2.5*21,300)*0.2 - 10,800

Purchases= 56,350kg

<u>Now, the total cost of purchase:</u>

Cost of purchase= 56,350*18= $1,014,300

7 0
2 years ago
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