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4 years ago

Identify which basic principle of accounting is best described in each item below.

Business

1 answer:

adelina 88 [10]4 years ago

4 0

Answer:

The Matching Principle

Explanation:

The Matching Principle of accounting holds that revenues should be matched with expenses. Hence the name.

This is to say, that revenues should only be recognized when the associated expenses with those revenues have been spent.

For example, in numeral a), we can see that Norfolk Southern Corporation recieved cash in advance, but it only recognized revenue once it had performed the services associated with that cash collection.

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the government decides to increase its spending by $3 billion. over time the real gdp increased by $12 billion. the expenditure

Luda [366]

When the government decides to increase its spending by $3 billion, Over time, the real GDP increased by $12 billion. The expenditure multiplier is 4.0. Hence, Option C is correct.

<h3>What is the expenditure multiplier?</h3>

With the help of the expenditure multiplier, one can see the impact of the changes that have occurred in autonomous spending. This will be calculated on the total spending and aggregate demand in the economy.

An illustration for better understanding is here:

Expenditure multiplier = Change in real GDP / Change in spending

Expenditure multiplier = 12 / 3

Expenditure multiplier = 4

Thus, the expenditure multiplier is equal to 4.0. Option C is correct.

Learn more about expenditure multiplier from here:

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5 0

2 years ago

Sanchez Company engaged in the following transactions during Year 1: Started the business by issuing $11,700 of common stock for

romanna [79]

Answer:69

Explanation:

69 69 69 69 69 on ga ng blo od

3 0

3 years ago

Rising inventories usually indicate an: a. economy that grows unexpectedly. b. economy that slows unexpectedly. c. unexpected sp

Amiraneli [1.4K]

Answer:

Option (b) is correct.

Explanation:

When the economy of a particular nation slows down, then as a result this will decreases the sales of the firms. Due to the economy slow down, the income of the consumers falls and as a result they won't be able to buy as much quantity of the goods as they want. Hence, the firms are left with large amount of output or we can say that inventories, as firms are not be able to sell all of their output to the potential buyers.

6 0

3 years ago

Air Spares is a wholesaler that stocks engine components and test equipment for the commercial aircraft industry. A new customer

nirvana33 [79]

Answer:

Explanation:

1. NPV = -1,700,000 + 2,055,000 * (1-0.008) / 1.02

= $298,588.24

2. Yes order should be fulfilled

3. Break-even probability = 1 - 1,700,000 * 1.02 /2,055,000

= 1 - 0.843795

15.62%

7 0

3 years ago

A 20-year maturity bond with par value of $1,000 makes annual coupon payments at a coupon rate of 8%. Find the bond equivalent a

motikmotik

Answer:

since you are required to calculate the effective yield to maturity, you cannot use the approximate YTM formula since it is not exact. You will need to use a financial calculator, online calculator or excel spreadsheet. I prefer to use an excel spreadsheet and use the IRR function:

a) initial outlay = -$970

cash flows 1 - 19 = $80

cash flow 20 = $1,080

IRR = 8.31%

Since the bond is sold at a discount, the effective yield will be higher than the coupon rate.

b) if hte bond is sodl at par, the effective yield to maturity is the coupon rate = 8%

c) initial outlay = -$1,170

cash flows 1 - 19 = $80

cash flow 20 = $1,080

IRR = 6.49%

Since the bond is sold at a premium, the effective yield will be lower than the coupon rate.

4 0

3 years ago