Answer: The correct answer is c. Expenses are reported on the income statement when cash is paid.
Explanation: Matching principle states that expenses are matched with the related revenue in the same period, that is, expenses incurred to generate related revenue are recorded during the same time interval the related revenue is recorded in order to show the true and fair position of the profitability of the company.
Based on the above definition, <u>only option C does not align with the matching principle</u><u> </u>because expenses should be recorded in the income statement when incurred and NOT when cash is paid. If it is recorded when cash is paid, it means <em>cash basis of accounting</em> is being applied.
Answer with Explanation:
There are so many factors affecting the demand for a particular commodity. Four of these are: the price of the complements, the income of buyers, changes in trend and advertisements.
1. The price of the complements - Some commodities are complementary with each other, just like cars and gas. If the <em>price of cars decreases</em>, then many people will purchase their own cars, which also follows that <em>the demand for gas will increase.</em>
2. The income of buyers - If the income of a person increases, then he will most likely purchase a particular commodity because he can afford it and has an extra money to purchase goods.
3. Changes in trend - Many people purchase goods because they're on trend. For example, if flare pants are fashionable this year, then the demand for it will increase. Once they're no longer on trend, the demand will drop.
4. Advertisements - The more advertisements a company spends on, the more likely buyers will purchase a specific commodity.
Answer: $86700
Explanation:
The net operating income is used in knowing the profitability of an investment. The net operating income is gotten by subtracting the expenses from the revenue.
Based on the information given in the question, the net operating income is $86700. Kindly check the attachment for further details.
Answer:
$180
Explanation:
Calculation to determine Cookie Creations’ warranty liability for the shipping costs at December 31, 2020.
Using this formula
Warrant liability=Numbers of mixers sold × Percentage of mixers returned for repair or replacement ×The average cost to ship a mixer
Let plug in the formula
Warrant liability=30 x 10% x $60
Warrant liability=$180
Therefore Cookie Creations’ warranty liability for the shipping costs at December 31, 2020 will be $180
