Answer:
Economic entity
Explanation:
Economic entity is the principle of accounting, which states that the finances of the business entity should be kept separate from those of the shareholders, owner, partners or the related businesses.
This principle of accounting is considered to be one of the core, fundamental accounting principles.
So, Jim is the owner of the marley appliances and he borrowed $100,000 for buying the home. Therefore, it will not be recorded as the liability because the money borrowed for personal use and as per economic entity concept, the finances of business entity is separate from those of owner.
Answer:
Yes, accept the special order.
Explanation:
Before Special Order After Special Order
120 units 160
Sales $8,400 $10,000
Less Variable Costs ($2,400) ($3,200)
Contribution $6,000 $6,800
Less Fixed Costs ($1,400) ($1,400)
Net Income $4,600 $5,400
Conclusion
As a result of special order, we have an additional profit of $800. Therefore, accept the special order.
Answer:
Explanation:
The main goal is to compare these two based on the same terms; present values. Find the present value of $500 today by discounting it using 10% interest rate over two years.
PV = FV/ (1+r)^n
where FV = Future value = $500
r = discount rate = 10% or 0.10 as a decimal
n = total duration of investment = 2
PV = $500/(1+0.10)^2
PV = $500/1.21
PV = $413.22
Since you are basing the decision on what you would rather pay, you would want a lower pay amount. The $425 is already in its present value terms and it is more expensive. Therefore, you would prefer to pay $500 in two years.
