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Bad White [126]
3 years ago
11

Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of t

he error?a. net income is understatedb. net income is overstatedc. cost of merchandise sold is understatedd. merchandise inventory reported on the balance sheet is overstated
Business
2 answers:
forsale [732]3 years ago
5 0

Answer:b. net income is overstated

Explanation:

The cost of inventory which is a constituent of cost of goods sold will have an impact on the income, an higher cost of inventory means low net income and lower cost of inventory means an higher net income. Therefore if the inventory is understated it leads to profit overstatement.

Net income will not be understated because a cost item has been understated but it will only be overstated, cost of merchandise sold is understated but this is the action and not the effect, merchandise on the balance sheet will be understated and not overstated.

xenn [34]3 years ago
4 0

Answer:

a. net income is understated

Explanation:

Using the formula

Revenue - cost of sales - operating expense =  net income

opening inventory + purchases - closing inventory = cost of goods sold

From the formulas above,

Understating closing inventory results an overstatement of cost of goods sold which invariably results in an understatement of net income.

The right option is a. net income is understated.

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The data-mining technique that creates a report or visual representation is _____.
Helga [31]

Answer:

The data-mining technique that creates a report or visual representation is summarization.

Explanation:

The business world has changed drastically over the years in terms of marketing and service delivery because of growth in technology. The use of machines and internet has caused a greater need for access and analysis of information in such a way that can make a business thrive in the market. This means that most businesses have to look into better data-mining techniques that can assist them in the competitive business environment.

The different data mining techniques include; association-rule learning, classification, summarization and regression. They are explained further as follows:

1. Association-rule learning: this is a machine learning technique that discovers a relationship between large databases using the concept of strong rules.

2. Classification: this technique finds similarities in features of two or more data sets and groups them into the same category.

3. Regression: this is a predictive technique that is used to identify and analyse the likelihood of a specific variable.

4. Summarization: this technique takes the results from the data and puts it in a way that it is short and understandable by most people. It usually involves the use of tables and other data summarization software like Excel sheets to represent the data in a way that conclusions can easily be drawn. Data summarization is important especially in the digital world where large amounts of data are available for analysis and transfer. This technique helps in breaking down huge data into short comprehensible reports that can easily be used for quick decision making.

3 0
3 years ago
Is the process of planning, scheduling, and then controlling the activities during system development?
bogdanovich [222]
This process is called project management it leads a team or group of people with this process to achieve a goal they want or need to meet but sometimes at a certain time. I hope this helps! 
8 0
3 years ago
The company estimates that it can issue debt at a rate of rd = 9%, and its tax rate is 40%. It can issue preferred stock that pa
klio [65]

Answer:

a)

Cost of debt (after tax) = 5.4%

Cost of preferred stock (r_p)  = 10.53%

Cost of common stock (r_e) = 16.18%

b)

WACC = 14%

c)

project 1 and project 2

Explanation:

Given that:

Debt rate (r_d) = 9% = 0.09

Tax rate (T) = 40% = 0.4

Dividend per share (D_p) = $6

Price per share (P_p) = $57

Common stock price (P_0)= $39

Expected dividend (D_1) = $4.75

Growth rate (g) = 4% = 0.04

The target capital structure consists of 75% common stock (w_e), 15% debt (w_d), and 10% preferred stock  (w_p)

a)

Cost of debt (after tax) =`r_d(1-T)= 0.09(1-0.4)=0.09*0.6=0.054

Cost of debt (after tax) = 5.4%

Cost of preferred stock (r_p) = \frac{D_p}{P_P}=\frac{6}{57}=0.1053 = 10.53%

r_p = 10.53%

Cost of common stock (r_e) = \frac{D_1}{P_0} +g=\frac{4.75}{39} +0.04=0.1618

r_e = 16.18%

b)

WACC=w_dr_d(1-T)+w_er_e+w_pr_p\\WACC=0.15*0.09(1-0.4)+0.75*0.1618+0.1*0.1053=0.14

WACC = 14%

c) Only projects with expected returns that exceed WACC will be accepted. Therefore only project 1 and project 2 would be accepted

4 0
3 years ago
Conor broke his wrist while playing basketball in the backyard. He ended up in the hospital. After an X-ray, MRI, doctor visit a
Anna11 [10]

Answer:

$6,000

Explanation:

A deductible is the amount Conor has to pay before his medical bills and prescriptions start getting coverage from his insurance.

Step 1: 10,000 - 2,000 = 8,000

A co-pay is a fixed amount the insured has to pay for certain medical services.

Step 2: 20% of 8,000 or 0.20 times 8,000 = 1,600

Step 3: add $2,000 (the deductible you have to pay) and $1,600 (the co-pay)

Total amount that Conor will have to pay for the hospital: $3,600

3 0
3 years ago
How do you make a deposit form?
Anna11 [10]
A deposit is a sum of money placed or kept in a bank account, usually to gain interest
6 0
3 years ago
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