Answer:
It must involve the transfer of resources to another entity.
Explanation:
A liability is defined as an obligation of future outflow of economic benefits that arise as a result of past actions either through sales , exchange of assets or services , or any other business related events.
Before a liability can be recognized , it must satisfy these three conditions
- It must involve probable outflow of economic resources
- A present obligation that arose as a result of past transactions
- It must involve a transfer of resources to another entity
Answer:
9.70 times
Explanation:
The formula and the calculation of the times interest earned ratio is computed below:
Times interest earned ratio = (Earnings before interest and taxes) ÷ (Interest expense)
where,
Earnings before interest and taxes = Net income after tax + interest expense + income tax expense
=$56,500 + $9,100 + $22,700
= $88,300
And, the interest expense is $9,100
Now place these values in the formula above,
so the ratio would be equal to
= $88,300 ÷ $9,100
= 9.70 times
Answer:
Importance : Opportunity cost is lost Contribution
Effect : Opportunity cost increases the variable costs of the decision that has been chosen
Explanation:
Opportunity Cost is a lost contribution. Contribution is calculated as Sales less Variable Costs.
Considering opportunity costs is very relevant to a firm because it constitutes part of the money lost that cold have been earned when another alternative course of action is chosen over another. The opportunity cost <u><em>would have been</em></u> the revenue for the disregarded option.
So opportunity cost increases the variable costs of the decision that has been chosen.
