Answer:
b. Both expenses & liabilities will be understated.
Explanation:
Accrual System of Accounting states that transactions should be recorded when they are entered into, irrespective of their cash settlement occurred r not.
Under Accrual Accounting System : Expense incurred but not yet paid , is an Outstanding Expense. It is recorded as an expense & a liability to be paid.
Journal Entry : Expense Dr to Expense Outstanding Cr
So, Not recording this 'Outstanding Expense' entry : leads to understatement of both expense & liability of that accounting period.
Answer:
Economic entity
Explanation:
Economic entity is the principle of accounting, which states that the finances of the business entity should be kept separate from those of the shareholders, owner, partners or the related businesses.
This principle of accounting is considered to be one of the core, fundamental accounting principles.
So, Jim is the owner of the marley appliances and he borrowed $100,000 for buying the home. Therefore, it will not be recorded as the liability because the money borrowed for personal use and as per economic entity concept, the finances of business entity is separate from those of owner.
Answer: true
Explanation: stockholders also known as shareholders are individuals or entities that own shares of stock in a corporation. They are therefore the real owners of a publicly traded business, however, management runs it. Therefore, it can be said that stockholders in a corporation entrust control over the company's daily operations to managers selected by the board of directors to run the company.
Answer: Moral hazard
Explanation: Moral hazard can be defined as a situation in which an individual starts taking more risk, which he can avoid, knowing the fact that the potential loss of the risk taken will be bore by someone else.
For example- An Individual not making proper fire extinguishing facilities in the house knowing that the loss in case of fire will be bore by the insurance company.
Hence, above explanation concludes that answer is option B.
A firm that makes shirts for a budget department store decides to develop a new cotton shirt type. The company would most likely make shirts that are less expensive to produce.
<h3>What is
the name of the business?</h3>
A corporation is a legal body that represents a group of people with a common goal, whether natural, legal, or a combination of both. A company can be run by the single person or a group of person decided to operate the company.
There are options in this question that are-
- sell at a high price
- be less costly to create
- use a nonrenewable resource
- satisfy the wants and needs of consumers
Thus, option B is correct.
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