1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
A research company has conducted an evaluation of European online retailers by asking consumers how well the websites helped the
vlabodo [156]

Answer: Survey

Explanation:

In discipline such as the applied statistics, survey methodology is referred to as the process under which one studies sampling of an individual unit from the population and thus associated techniques or methods of the survey data collection, i.e. questionnaire construction. The survey methodology tends to include the instruments or the procedures which ask one or few more questions which may be answered.

5 0
3 years ago
Nerdherd electronics sells three different sizes of televisions at three different prices. in this case, the company's pricing s
Elza [17]
<span>Nerdherd electronics is definitely using Cost-plus pricing strategy. In this case Nerdherd electronics determined their selling price based on a specific dollar amount markup to the televisions unit cost. The question says three different sizes of television, so it is same television but different sizes and the bigger the size of the television the higher the unit cost. So the bigger sized television unit cost added to the dollar amount mark up will be different from the smaller size television unit cost added to the dollar amount. Resulting in the three different sizes of the television having different selling prices.</span>
4 0
4 years ago
Marin Corporation issues $520,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the ma
ikadub [295]

Answer:

The issue price of the bond is $ 487,598 as calculated in the attached  

Explanation:

The issue price of the bond is the present value of the future cash flows payable by the bond.The discount factor with which to multiply the future cash flows to arrive at present value is modified by dividing the rate by 2 to show that interest is payable semi-annually and also by multiplying n, the number of years by 2 to indicate that the interest would now be paid at a time that doubles the original time horizon.

The formula for present value in the case is :FV/(1+10%/2)^n*2

In calculating the present of coupon interest received in the first six months,the coupon interest is calculated $520000*9%/2=$23400,then the present of this amount is gotten by multiplying $23400 with (1+10%/2)^1*2

Find detailed computation in the attached.

The par value of $520000 is added to the last interest as it payable then.

Download xlsx
4 0
4 years ago
Suppose two coffee snobs who must have their coffee and cream in exact proportions (each cup is 10 coffee per 1 unit cream) are
kondaur [170]

Answer:i think it is b tbh

Explanation:

6 0
3 years ago
Which of the following statements is correct? Multiple Choice Interest rates and bond prices vary directly. Interest rates and b
nevsk [136]

Answer:

Interest rates and bond prices vary inversely

Explanation:

The relationship between interest rate and bond prices can be seen in the bond pricing formula. Given a series of coupon payments (C) paid over the lifetime (ranging from "1" through "i" to "n") of a bond, and given that the bond will repay the principal investment (F) at maturity, the price of the bond is

P = ∑\frac{C}{(1+r)^{i}}  + \frac{F}{(1+r^{n})}

where "r" is the interest rate.

As seen in the formula, the price of the bond (P) is inversely related to the interest rate (r).

Option A is incorrect because interest rates and bond prices vary indirectly, not directly. Option C is incorrect because interest rates and bond prices are related. Option D is incorrect because vary inversely irrespective of inflation and recession.

8 0
3 years ago
Other questions:
  • The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:
    14·1 answer
  • In the small town of Someko, Michigan there are 5 hotels with a combined total of 650 sleeping rooms. During the month of June a
    9·1 answer
  • Clonex Labs, Inc., uses the weighted-average method in its process costing system. The following data are available for one depa
    10·1 answer
  • We can reduce volatility by investing in less than perfectly correlated assets through diversification because the expected retu
    7·1 answer
  • An analysis of Baker, Inc.'s operating income for the last two years showed the following: Operating income for 2011 $1,200,000
    10·1 answer
  • Each of the following is mentioned in your textbook as a tip for using statistics except:________ a. use statistics sparingly. b
    5·1 answer
  • Managerial accounting differs from financial accounting in several areas. Specify whether each of the following characteristics
    13·1 answer
  • Ebbers Corporation overstated its ending inventory balance by $7,000 in the current year. What impact will this error have on co
    12·1 answer
  • A $10,000 bond with 18%/year, compounded semi-annually (interest is paid every six month) is available in the market. The bond m
    5·1 answer
  • The acronym dealor can be used to remember how debits and credits affect different accounts. the three types of accounts that ar
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!