Answer:
A. Accounts Payable 1,280 Cash 1,280
Explanation:
Jawbreaker Company paid $640 on account to a creditor. The transaction was erroneously recorded as a debit to Cash of $640 and a credit to Accounts Payable of $640.
The correcting entry is a debit to Accounts Payable of 1,280 and a credit to Cash of 1,280
The correct entry for payment of a creditor on account is to
Dr Account Payable........640
Cr Cash......................................640
However the opposite to the above entry was passed which will give rise to an error double the impact of the transaction value because:
1.The correct transaction to the value of $640 is missing
2. The opposite of the transaction to the value of $640 is existing.
Hence the impact of the error is double the amount which explains the reason why the correction involved twice the value of $640 which is $1,280
Answer: 25%
Explanation:
The Sharpe Ratio will be calculated by using the formula:
= (Rp−Rf)/σp
where,
Rp = return of portfolio = 0.08
Rf = risk-free rate = 0.03
σp = standard deviation of portfolio’s excess return = 0.20
Therefore, Sharpe Ratio will be:
= (Rp−Rf)/σp
= (0.08 - 0.03)/0.20
= 0.05/0.20
= 0.25 or 25%
The Sharpe ratio is 25%.
To partially eliminate the problems that are associated with the short-term focus of return on investment, residual income, and EVA, the performance of a division's major investments is commonly evaluated through (E) post audits.
<h3>
What are post audits?</h3>
- The post-audit procedure establishes a formal process (feedback) for assessing whether existing initiatives should be continued, extended, or discontinued.
- That is, the post-audit gives useful information that can be used to fix problems before an investment's performance is jeopardized.
- The purpose of the post-audit review process is to ensure that management has addressed all of the recommendations given in the Audit Report.
- The Post-Audit Review occurs shortly after the agreed-upon implementation deadline, which management committed to in the management response.
Therefore, to partially eliminate the problems that are associated with the short-term focus of return on investment, residual income, and EVA, the performance of a division's major investments is commonly evaluated through (E) post audits.
Know more about post audits here:
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