Answer: 10%
Explanation:
Short sale of 600 shares at $25 will yield:
= 600 * 25
= $15,000
You posted 40% of this:
= 40% * 15,000
= $6,000
The profit in a year seeing as the price fell is:
= (25 - 24) * 600 shares
= $600
Rate of return is:
= Profit / Margin posted
= 600 / 6,000 * 100%
= 10%
Option A
A toothpaste maker claims that it’s product prevents more cavities that other brands.
This action is a violation of Cost Principle or Historical Cost Concept.
<h3>What is Historical Cost Concept?</h3>
The historical cost principle states that a company or business must account for and record all assets at the original cost or purchase price on their balance sheet and not at its market price.
The historical cost principle forms the foundation for an ongoing trade-off between usefulness and reliability of an asset.
Thus, if the modern enterprises reported all assets in the accounts at current market value. This action is a violation of Cost Principle or Historical Cost Concept.
Learn more about Historical Cost Concept here,
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Answer:
company sells a limited quantity of high-unit cost items.
Explanation:
A specific identification method can be defined as a method used for determining the ending inventories cost.
Basically, this type of method for costing inventories typically involves doing a well-detailed physical count of each goods bought on a specific date or a particular period of time, so as to determine the exact number of goods remaining by the end of the year's inventory. Therefore, each of the goods purchased are tagged with their unit price and any other additional charges.
Hence, the specific identification method of costing inventories is used when the company sells a limited quantity of high-unit cost items.
