Answer:
- The lessee reports a single amount of lease expense, which is equal to interest expense plus amortization expense, in its income statement.
- The lessee reports lease expense on a straight-line basis and the lessor reports lease revenue on a straight-line basis over the lease term.
Explanation:
An operating lease is basically renting an asset from a lessor where the lessee will pay a certain amount every period for the use of the asset.
This rent payment is equal to the interest expense plus amortization expense and will be reported in the income statement of the lessee as an expense.
This amount will also be reported on a straight-line basis for the duration of the lease term which means that even if rent increases, it will still have to be reported by the same amount over the lease period because the lease increase should have been taken into account already.
The lessor also reports lease revenue on a straight-line basis over the lease term.
It is a false statement that a debit is always a negative entry under the double-entry system of accounting,
<h3>What is the double-entry system?</h3>
In accounting, this refers to the system for recording transactions based on recording increases and decreases in accounts so that debits equal credits.
Hence, the double-entry system requires that each transaction must be recorded in at least two different accounts.
Read more about double-entry system
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A. Mood, interest.
Keeping your MOOD and INTEREST in mind will dictate what you say and how you say it.
Answer:
d. price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers.
Explanation:
Michael Porter specified 4 generic strategies for gaining competitive advantage, which are namely,
1. Cost Focus
2. Differentiation Focus
3. Cost Leadership
4. Differentiation
Cost leadership refers to charging lowest price and attaining cost advantage in the industry.
Differentiation refers to designing products with unique attributes.
Striving to be low cost provider would be most attractive when the buyers have low switching costs i.e it is easier and cheap to switch between products and wherein buyers are large and exercise considerable bargaining power.
Thus, the correct option is (d). price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers.
Answer: Clay Company
Explanation:
Based on the information given, the current, previous year and two previous years beforehand profit margins of Clay company are greater than the corresponding profit margins of Roak company.
This means that Clay company has a better profit margin and shows that they retain a higher percentage of their revenue after costs are taken out as opposed to Roak company.
