Answer:
False
Explanation:
An increase in financial leverage only results in a higher return on equity when the return on assets is higher than the cost of the leverage (i.e. the interest rate on debt).
Given the relationship below among, total assets, equity and debt (leverage)
total assets = equity + debt
and equity = total asset - debt,
We can deduce the equation below
Return on Equity = Return on Asset (ROA) - Return to Debt (ROD) (approximately)
Accordingly, if ROA is greater than ROD, an increase in financial leverage will result in a higher ROE. If the cost of debt (ROD) is however higher than ROA, an increase in financial leverage will result in a lower ROE.
Answer:
Viking Office Supply
Debit Accounts Receivable $4,000
Credit Allowance for Uncollectible Accounts $4,000
To revise the write-off of past-due account.
Debit Cash Account $1,200
Debit 15% Notes Receivable $2,800
Credit Accounts Receivable $4,000
To record the cash receipt and notes settlement.
Explanation:
Since the account is past-due, it must have been written off as uncollectible expense. To revise this entry, a credit is made to the Allowance for Uncollectible Accounts and a debit to the Accounts Receivable.
Then a debit to the Cash Account in the sum of $1,200 and a debit to the Notes Receivable account for $2,800 and a credit to the Accounts Receivable.
Answer:
The ending inventory is
Units Unit Cost Total
6 $6,35 $38,1
Explanation:
AVCO Perpetual chart is attached.
AVCO Perpetual chart shows purchases , sales and balance of each period. Highlighted you will find the balance at the end of every purchase or sale.
When you have a purchase: Use the following formula to get the weighted-average cost by unit:
(P₁*Q₁)+(P₂*Q₂)/(Q₁+Q₂)
P₁ and Q₁ are the balance from operation that you made before.
P₂ and Q₂ is the data of the new operation (new purchase)
When you have a sale: you only discount the Quantity and use the average cost by unit to get the final inventory.
The balance at the end of June is:
Units Unit Cost Total
6 $6,35 $38,1
Answer:
C. Risk Management Association provides common-size statements for most industries.
Explanation:
Benchmarking is a process of comparing a company's performance or processes to the best practices in the industry or a competitor. Benchmarking is a way to determine company's abilities and weaknesses, in order to improve its internal processes and functions.
The industry average serves as a useful tool for the companies to benchmark their performance. For this purpose Risk Management Association provides common-size statements for most industries to evaluate their company.
Answer:
Explanation:
A sales quote allows a prospective buyer to see the costs that will be involved for desired work.
