Answer:
The difference between autonomous expenditure and induced expenditure is as follows:
The autonomous expenditure is incurred even without a disposable income. The expenditure is incurred to provide basic necessities of life. In such a situation, the person spends from savings account or borrows to ensure that the basic necessities are provided.
On the other hand, induced expenditure is a disposable income-based expenditure. This implies that when disposable income rises, induced expenditure also rises, and vice versa. Induced expenditure is usually incurred to fund normal goods and services and not necessities. Without disposable income, there is no induced expenditure.
All the four sectors of the economy engage in these expenditures. The public (government) and household sectors are mostly affected. However, even the business and non-profit sectors are also affected by these types of expenditure.
Explanation:
We can distinguish between two types of aggregate expenditure. The first one is autonomous aggregate expenditure, which does not vary with the level of real GDP while induced aggregate expenditure varies with real GDP.
Answer:
13.44%
Explanation:
Debt to total assets = Total Debt / Total Assets
45% = Total debt / $230,000
Total Debt = $230,000 x 45% = $103,500
As we know
Assets = debt + Equity
$230,000 = $103,500 + Equity
Equity = $230,000 - $103,500 = $126,500
Return on Equity is the measure of financial performance which can be calculated by dividing net income for the year by total shareholder's equity.
Return on equity = Net income for the year / Shareholders equity
ROE = $17,000 / $126,500 = 0.1344 = 13.44%
Answer:
Closing retained earning is $414,540
Explanation:
The Retained Earnings figure can be calculated using the following equation:
Closing Retained Earnings = Opening Retained Earnings + (Sales - Expenses - Dividends)
Here
Opening balance of Retained Earning is $397,620
Revenues is $56,400
Expenses are $33,840
Dividends paid are $5,640
The purchased equipment is not considered here because it is increase in asset not an increase or decrease in revenue or expenses. So it is not considered here.
So by putting values, we have:
Closing Retained Earnings = $397,620 + ($56,400 - $33,840 - $5,640)
Closing Retained Earnings = $414,540
Answer:
Accounting information helps users make business and financial decisions.
Explanation:
Users of accounting information are divided into :
- Internal users
- External users
Internal users include : owners, managers, employees
External users include : shareholders, tax authority, regulatory bodies
Based on the information contained in the financial information a shareholder can decide if to invest in a company or not to.
Also, mangers can decide to invest in new ventures based on the information on profitability contained in the financial statements.
