I believe this would result to a debit to cash and a credit to common stock. This is because the transaction would result to an increase in cash (asset) and a decrease in stock (asset). A journal is a record used in accounting in which transactions are initially recorded in order of when they were undertaken.
Answer:
Accounting plays a vital role in running a business because it helps you track income and expenditures, ensure statutory compliance, and provide investors, management,
<u>Answer:</u>
<em>B) Selling costs of a sales department are not inventoriable</em>
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<u>Explanation:</u>
The inventoriable price is the cost from the provider in addition to all costs essential to get the thing into stock and prepared available to be purchased, for example, cargo in. For a maker, the item expenses incorporate direct material, direct work, and the assembling overhead (fixed and variable).
Inventoriable costs once in a while fluctuate, starting with one industry then onto the next, and they additionally vary, starting with one provider then onto the future down the store network.
Answer:
B: $1,500 is recognized this year, $ 9,000 next year and $ 7,500 in last year of contract.
Explanation:
Steven has adopted the accrual method in recording its revenue.
Accrual is an accounting concept which means expenses and revenues are recorded by a business when they are incurred not when cash is received or paid.
Accrual basis of accounting gives more accurate and true results as compare to cash basis accounting.
The payment received in September of $ 18,000 was the income for 24 months so it was wrong to record the whole amount as an income in September.
In the first year 2 months of income is recorded for November and December ($ 18,000÷24 = $750 per month) $750 × 2 = $1500.
In the second year 12 months revenue will be recognized ($750 per month × 12 = $ 9,000)
In the last year 10 month remained out of 24 months so the income recognized was ( $750 × 10 = $ 7,500)
Answer:
OPTION 1:
net income = $100,000
return on equity = $100,000 / $400,000 = 25%
OPTION 2:
net income = $100,000 + $50,000 - ($160,000 x 8%) = $150,000 - $12,800 = $137,200
return on equity = $137,200 / $400,000 = 34.3% (yields highest returns but also increases risk)
OPTION 3:
net income = $100,000 + $50,000 = $150,000
return on equity = $150,000 / ($400,000 + $160,000) = $150,000 / $560,000 = 26.79%
