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solmaris [256]
3 years ago
10

Steve is in charge of accounting for the purchase of equipment at Cal Works, Inc. The company has a policy that all expenditures

greater than $1,000 (1% of total expenditures) have to be capitalized; less than $1,000 expensed. Steve is under pressure to report high earnings. He takes one $600 and $900 expenditure, adds them together, and records a capital expenditure for $1,500. Which of the following reasons and rationalizations might Steve use for his action: Group of answer choices
A. One-time request
B. Standard Practice
C. Representational faithfulness
D. Materiality
Business
1 answer:
Svetlanka [38]3 years ago
5 0

Answer: Materiality

                   

Explanation: In simple words, materiality refers to the accounting concept which states that only those transaction should be recorded in the financial statements which are important to the stakeholders.

In other words, the transactions should be recorded in such a way that it gives some value to the stakeholders.

Therefore, in the given case, steve reported two expenditures in the fiancial statement as the amount is significant, thus,must be holding the value to stakeholders.

Hence the correct option is D.

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Explanation:

If interest rates suddenly rise by 2 percent, the percentage price change of bond J is -18.80% while the percentage price change of bond K is -15.46%

The calculation is provided below

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3 years ago
A stock just paid an annual dividend of $0.40 per share. The firm expects to increase the dividend by 20 percent per year for th
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Answer:

12.78

Explanation:

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7 0
3 years ago
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Answer:

$237,500

Explanation:

Cost of building      $10,000,000

Avoidable Interest            $300,000

Less;Salvage value           ($800,000)

Depreciation  Cost        $9,500,000

Depreciation per year $9,500,000/40=$237,500

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