Question Completion:
Describe the accounting treatment of Supplies Expenses.
Answer:
Supplies Expenses are debited while the Supplies account is credited with the supplies expenses.
Explanation:
This accounting treatment of Supplies Expenses reduces the balance of the Supplies account by the amount of supplies used during the period. Thus, what is left in the Supplies account is the cost of the unused supplies at the end of the accounting period. The treatment also accords with the accrual concept, which requires that expenses are matched to the revenues that they generate in the period.
Answer:
B. Depreciation allocates replacement values as part of the matching of revenues and expenses.
Explanation:
Depreciation allocates replacement values as part of the matching of revenues and expenses is not entirely true about depreciation accounting.
The primary goal of the financial manager of a profit-seeking organization is to make profits. This will keep the company in a great market position.
Answer:
14%
Explanation:
Rate of return = Coupon + (Selling price - face value) / face value
Rate of return = $98 + ($1,020 - $980) / $ 980
= 0.14
= 14%
YTM = [C + (F - P) / n] ] / [(F + P) / 2 ]
Where:
- C = Coupon
- F = Face Value
- P = Selling Price
- n = Years to Maturity.
YTM = [$98 + ($980 - $1020) / 5] ] / [($980 + $1020) / 2 ]
= 0.09
= 9%
Thus, the yearly rate of return (14%) is higher than the coupon rate (10%), and the YTM (9%).
