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3 years ago

Which of the following is true of the cash method of accounting?

Business

1 answer:

Svetlanka [38]3 years ago

8 0

Answer:

D. Recording of income can be put off until the next tax year when the income is actually received.

Explanation:

The cash accounting system is one of the two accounting in use. The other one being the accrual method.

In cash accounting, revenues and expenses are recognized or recorded only when money changes hands. It means that transactions will be recognized in the period when the money is received or paid. Revenue will be recorded when money is received, and expenses will be recognized when payments are made. Practically, transactions from a previous period can be recognized in the following year when money is received.

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Lower of Cost or Market The accountant for Murphy Company prepared the following analysis of its inventory at year end: Item Uni

Nina [5.8K]

Answer:

$52,860

Explanation:

The computation of the ending inventory using the lower of cost or market method is shown below:

Product Cost Net realizable value Lower of cost or NRV

RSK-89013 600 × $38 = $22,800 600 × $47 = $28,800 $22,800

LKW-91247 420 × $47 = $19,740 420 × $40 = $16,800 $16,800

QEC-57429 510 × $26 = $13,260 510 × $32 = $16,320 $13,260

Carrying value of the ending inventory is $52,860

7 0

3 years ago

Why does the “rfm” rubric present the three key measures (recency, frequency, and monetary value) in that order?

snow_lady [41]

The order of the attributes in RFM conforms to the order of their importance in ranking customers. Recency is the most important factor. Recency alone won’t sort out your good customers from your new ones. You need frequency for that. Frequency measures the intensity of a customer’s relationship with your business. How much a customer spends on average or in total is the final measure of his or her monetary value.

5 0

3 years ago

A farmer grows a bushel of wheat and sells it to a miller for $1. The miller turns the wheat into flour and then sells the flour

SIZIF [17.4K]

Answer: $Value added by farmer = $1 Value added by miller = $2 Value added by the baker = $3$

GDP contribution is $6.

Explanation: GDP refers to the market value of final goods and services produced withing the national territory of a country.

Using the value added method, we can calculate GDP by summing up the value added at each level of production.

$Value added by farmer = $1 Value added by miller = $3 -$1 = $2 Value added by the baker = $6 - $3 = $3$

$GDP = Value added by the farmer +Value added by the miller + Value added by the baker = $1 + $2 +$3 =$6$

Using the expenditure approach, GDP is the market value of the final good sold to the customer.

GDP = Cost of bread to the engineer = $6

6 0

3 years ago

A credit rating (score) of ________ would normally allow you to have easy approval for credit.

NikAS [45]

500 <<<<<<<<<<<<<<<<<<<<<<<<<<

7 0

3 years ago

You are scheduled to receive $10,000 in one year. What will be the effect of an increase in the interest rate on the present val

katovenus [111]

Answer:

The present value of this cash flow will be decreased following the increase in the interest rate.

Explanation:

We have the formula for calculating present value is:

PV = FV / ( 1+r)^n

where:

PV is the present value

FV is the future value which is $10,000 in the described question

r is the discount rate which is the interest rate

n is the number of discounting periods which is one year in the described question

So, once the interest rate increase, the denominator - (1+r)^n - will increase. Then, if FV remains constant, PV will decrease.

So, The present value of this cash flow will be decreased following the increase in the interest rate.

3 0

3 years ago