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spin [16.1K]
3 years ago
5

A company records the fees for legal services paid in advance by its clients in an account called Unearned Legal Fees. If the co

mpany fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned on effect will be
An understatement of equity T/F
Business
2 answers:
White raven [17]3 years ago
5 0

Answer:

True

Explanation:

Now the initial jounal entry of the Unearned Fees was recorded as:

Dr Cash received XX

Cr        Unearned Fees XX ........... Is a liability

Now the reason why the statement is true can be best explained from the following equation:

Equity = Ordinary Stock + (Revenue - Expense - Dividend)

Now just look at the above equation and the journal entry, the unearned fees increased the liability and if this amount is not waived off to the amount the unearned fees are converted to earnings, I mean if you have received the amount for 3 months services in advance and only one month services are delivered then the 1/3 part of the unearned fees will recognized as earned. If it is not complied then we can see in the above equation that the revenue would decrease and this decrease will decrease the equity.

mezya [45]3 years ago
5 0

Answer:

T

Explanation:

At the end of each accounting year, the net income made is posted to the year end retained earnings thus increasing the shareholder's equity in the balance sheet.

When fees are received in advance,

Debit Cash account

Credit Unearned Legal Fees

when fees are earned

Debit Unearned Legal Fees

Credit Revenue

Thus, If the company fails to make the end-of-period adjusting entry to record the portion of these fees that has been earned on effect will be an understatement of revenue which will result in an understatement of net income and thus an understatement of equity.

True

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In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to wh
kobusy [5.1K]

Answer:

Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory

Explanation:

Cost of goods sold is the total direct costs of producing the goods sold by a company.

Cost of goods sold = cost of direct materials + cost of direct labour + Manufacturing Overhead  + Beginning work in process inventory – Ending work in process inventory

7 0
3 years ago
During a period of economic expansion, when expected profitability is high, the: select one: a. Equilibrium price of bonds incre
spin [16.1K]

During a period of economic expansion, the demand curve for bonds shifts to the left.

<h3>What is the effect of an economic expansion?</h3>

During an economic expansion, the supply of money in the economy rises and the demand for money also increases. This leads to an increase in the interest rate and the price of the bonds would fall.

If expected profitability is expected to be high, people would prefer to hold more risky investment. Thus, there would be a fall in the demand for bonds. The demand curve for bonds would shift to the left.

Here are the options to this question:

A) the demand curve for bonds shifts to the left.

B) the supply curve of bonds shifts to the right.

C) the equilibrium interest rate falls.

D) the equilibrium price of bonds rises.

To learn more about economic expansion, please check: brainly.com/question/831569

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4 0
2 years ago
The risk-free rate is 3.4 percent and the expected return on the market is 10.8 percent. Stock A has a beta of 1.18. For a given
otez555 [7]

Answer:

The systematic portion of the unexpected return is 1.180% and the unsystematic portion was 0.288%

Explanation:

E(R) = 0.034 + 1.18*(0.108 - 0.034) = 0.12132

R - E(R) = 0.136 - 0.12132 = 0.01468

RM - E(RM) = 0.118 - 0.108 = 0.01

[RM - E(RM)] * Beta = 0.01 * 1.18 = 0.0118 = 1.180%

[R - E(R)] - [RM - E(RM)] * Beta = 0.01468 * 0.0118 = 0.00288 = 0.288%

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3 years ago
In the equation of exchange, the average number of times a dollar is used to purchase a final good or service is the __________
Dominik [7]

Answer:

Explanation:

Exchange

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2 years ago
What happens to price when the cost of resources rise and falls
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In any business, when the cost of resources rise, the price of buying the commodity will also be high, this is because when it cost you much to produce a commodity, you will end up charging a higher price when selling it. Failure to do so may lead to making loses. The opposite is also true, when the cost of resources fall, the pricing will also be less.
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