George Stigler is a known American economist and according to his theory the Consumer theory, he quoted that <span>“if consumers do not buy less of a commodity when their incomes rise, they will surely buy less when the price of the commodity rises.” This means that when consumers do not purchase a certain product even if their incomes increases, that is considered normal, but when the product increases in value, we can expect that these consumers will buy less of the product.</span>
Answer:
b. discounting
Explanation:
Your sister has just been told that she will be given a $1,000 bonus next year. She is very eager to know its present value. So, she applies the <u>discounting</u><u> </u>process to estimate the present value of her gift.
Discounting: It is a mechanism used for determine the present value of money, which is going to be paid in future. As debtor use this mechanism to delay payment of creditor for a certain period of time in exchange of some fees or charge to be paid. As time value of money change and it does not remain same.
There are mainly three type of discounting:
- Trade discount
- Quantity discount.
- Cash discount.
Hence in the given case, she applies the discounting process to estimate present value of her gift.
Answer:
B. Not honor the delegation because the contract is based on personal skill.
Answer:
The biggest challenge is PNG
Answer:
Explanation:
The journal entry is shown below:
On September 30
Bonds payable A/c Dr $1,000,000
Loss on bond retirement A/c Dr $20,000
To Discount on Bond A/c $10,000
To Cash A/c $1,010,000
(Being the callable bond is recorded)
The computation is shown below:
For cash
= Par value of bond + Premium
= $1,000,000 + $10,000
= $1,010,000
For Loss, it would be
= $1,010,000 - $990,000
= $20,000
And, the remaining amount would be transferred to discount on bond
