The third one ( The supplemental Poverty Measure includes nonmonetary benefits like housing subsidies and tax credits, while the official poverty measure does not.)
Answer:
As such, the effect on the elements of the financial statements are
Cash increases by $1,045 and receivable decreases by $1100 resulting in a net decrease in assets by $55.
Expense in the statement of other income increase by $55, thereby resulting in a decrease in owner's equity by the same amount.
Explanation:
This type of transaction is called factoring of receivables. When receivable are factored, the company sells the receivable to another and incurs a charge.
This is usually done to ease liquidity pressures.
The entries required on factoring
Debit Cash
Debit Factoring/interest expense
Credit Account receivable
The Factoring charge
= 5% * $1,100
= $55
Amount of cash received
= $1,100 - $55
= $1,045 (posted to cash)
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The Current ratio equals 2.9, the Accounts receivable turnover equals 5.77 and Average collection period equals 63 days.
<h3>What is Current ratio?</h3>
= Current Assets / Current Liabilities
= 145,000 / 50,000
= 2.9
<h3>What is Accounts receivable turnover?</h3>
= Net sales / Average Accounts Receivable
= 375,000 / )(70,000 + 60,000) / 2)
= 5.76923076923
= 5.77
<h3>What is Average collection period?</h3>
= 365 Days /Average Receivable Turnover ratio
= 365 / 5.77
= 63.2582322357
= 63 days
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Answer:
d) Avoidable costs are also known as sunk costs.
Explanation:
The avoidable cost are those cost that can be ignored while making decision. The sunk costs are all those cost which already been incurred and it will not be effected by the change in decision. The sunk costs are already been expensed so, whatever decision you make it will not be changed.