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ra1l [238]
3 years ago
9

Explain how accrual accounting differs from cash basis accounting if:A. Prepaid insurance beginning $400B. Payments for insuranc

e during the period $1,200C. Prepaid insurance ending $700
Business
1 answer:
Radda [10]3 years ago
7 0

Answer:

Difference between accrual accounting and cash basis accounting:

The insurance expense for the period will be $900 under the accrual accounting basis.  But with the cash basis of accounting, the insurance expense for the period will be $1,200 being the amount of insurance paid during the period.

Explanation:

a) Data:

A. Prepaid insurance beginning $400

B. Payments for insurance during the period $1,200

C. Prepaid insurance ending $700

With accrual basis, the insurance prepaid of $400 at the beginning will be accounted as expense in the current year when the services are consumed.  The amount would be debited to the Prepaid Insurance account as a current asset.  The payments for insurance during the period of $1,200 are also added to the beginning prepayment.  Then the prepaid insurance ending of $700 is deducted (credited) to the insurance account to arrive at the insurance expense for the period.

The cash basis accounting will charge the sum of $1,200 as the insurance expense for the period with no regard for the beginning and ending balances of prepayments.

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The profit margin is the financial gain from a sale after the costs of providing the sold product have been deducted. Thus, the statement is true.

<h3>What is the profit margin?</h3>

Profit margin is the portion of sales that a company keeps after all costs are subtracted. It essentially displays the percentage of each dollar of sales that is kept as profit. A 15% profit margin, for instance, means that a company keeps $0.15 from every dollar of sales produced.

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6 0
1 year ago
A new security system has a price-tag of $8,000, but should save your company $3,600 each year for the next 10 years in reduced
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If the required rate of return is 7.2%, no such security shall be purchased.

<h3>What does the required rate of return mean?</h3>

The required rate of return is the expected percentage of returns on investment at the time the investment is made. The required rate of return, in this case, is 7.2%.

The actual returns earned from purchasing the security for $8000 and receiving returns of $3600 are calculated to be around a 3.6% return.

As a result, if the required rate of return on investment is 7.2%, the security should not be purchased.

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3 0
2 years ago
Barans Company purchased merchandise on account from a supplier for $12,900, terms 1/10, n/30. Barans Company returned $2,500 of
11Alexandr11 [23.1K]

Answer: See explanation

Explanation:

a. If Barans Company pays the invoice within the discount period, what is the amount of cash required for the payment?

The amount of cash required for the payment will be:

Purchases: = $12,900

Less: Returns = $2500

Less: Discount = ($12900 - $2500) × 1% = ($10400 × 1%) = $104

Cash required for payment = $10296

b. What account is credited by Barans Company to record the return?

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3 years ago
In a within-groups design, each participant experiences all levels of the –. There are two types of this design. The first is th
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In a within-groups design, there are two types of this design which are:

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<h3>What is  within-groups design?</h3>

A within-groups design is known to be a kind of an experimental design that is one where each participant is said to often experiences the total levels of the independent variable.

Note that there are two types of this design which is the repeated-measures design whose role is to measure or one  where participants are said to be opened to a lot of levels of the independent variable and they are known to be tested on the dependent variable after every exposure.

The second is said to be the concurrent-measures design and this is one where participants are said to communicate with the different levels of the independent variable in a simultaneous way..

Hence, In a within-groups design, there are two types of this design which are:

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8 0
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Blake Edwards has done some research and has discovered that economists believe interest rates will rise significantly over the
joja [24]

Answer:

Economic conditions

Explanation:

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