1. ignorance of laws/statutes/regulations in each country and communication issues
2. vulnerability of being a new entry in global competition
3. off-site business, finding trustworthy trade partners whom you've never met
Answer:
a. The Debit column is correctly stated.
b. The Credit column is understated by $17,300 ($8,650 * 2).
c. The Automobiles account balance is correctly stated in the trial balance.
d. The Accounts Payable account balance is understated in the trial balance by $17,300 ($8,650 * 2).
e. If the Debit column total of the trial balance is $200,000 before correcting the error, the total of the Credit column before correction is $182,700.
Explanation:
This mistake is an Error of Commission. It is a problem of arithmetical accuracy, for example, posting to the wrong side of one ledger account. In this case, the Accounts Payable should have been credited with the amount of $8,650. As an arithmetic error, it can only be corrected by doubling the affected amount on the Credit side of the Accounts Payable account.
Answer:
The Net Operating income will be the same for both methods.
Explanation:
Net Operating income under absorption costing and variable costing methods usually differ because of existence of inventory.
Fixed overheads are deferred in Inventory when using absorption costing. Meaning that a higher income is obtained under absorption costing than variable costing when there is inventory and a lower income under absorption costing than variable costing.
When units produced are units sold, there is no inventory. Therefore, the Net Operating income will be the same for both methods.
