Answer:
D. Liabilities are overstated
Explanation:
The given journal entry is
Cash A/c Dr XXXXX
To Account payable A/c XXXXX
(Being the cash collection is recorded)
This above journal entry is wrong.
The correct journal entry is as follows:
Cash A/c Dr XXXXX
To Account receivable A/c XXXXX
(Being the cash collection is recorded)
For rectifying this error, either we reverse the given entry and pass the correct journal entry that is shown above or pass the entry that is given below:
Account payable A/c Dr XXXXX
To Account receivable A/c XXXXX
So, we can see the liabilities accounts are overstated due to this error
Answer:
Divisional product structure
Explanation:
Divisional product structure is also referred to as a product based structure. Employee are shared into divisions based on products they manufacture and sell within a particular geographic location.
The advantage of this structure is that employees work efficiently on the production and sale of one particular product.
This is ideal for ABC production that are expanding from a single product line into several diverse product groups, with most sales within one country.
Answer:
Costs that have already been incurred
Explanation:
Sunk costs are costs already incurred which are irrecoverable. These costs will stay the same irrespective of business actions and are also not considered for business decision in the future as they are deemed irrelevant .
If an organization wants to decide on business actions, they make use of relevant costs as they are cost meant for the future and will still be incurred. Revenue and cost that varies are only considered by organization to make a decision.
Example of sunk cost is money spent on rent. This money incurred cannot be recovered once it has been paid.
Answer and explanation:
If a company has a payable in a foreign currency and the local currency weakens, the initial amount of the payable will be higher in the local currency of the firm which will represent a company loss. <em>The loss must be recorded in the financial statements the very same date</em> where the loss takes place regardless the payable will be paid on the same day.