<span>The interest rate can drastically change the total amount paid to the lender</span>
Answer:
a. Overstates Year 1 cost of goods sold.
b. Understates Year 1 net income
c. Understates Year 2 cost of goods sold
Explanation:
a. The formula for Calculating the Cost of Goods sold is;
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
If the closing inventory is understated, it will reduced the amount being subtracted from Purchases and Opening inventory which would means that Cost of Goods sold will be overstated.
b. The Cost of goods sold is deducted from sales to give Gross profit. If Cost of goods is overstated, it will reduce Gross Profit higher than it should. A lower Gross Profit equates to a lower Net Income.
c. Going by the formula in <em>a;</em>
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
In Year 2, the understated Year 1 closing stock will become the understated Year 2 Opening stock. With the opening stock understated, the Cost of goods will be understated as well because Opening stock is meant to increase Cost of goods sold as the formula shows. If it is understated, the amount that it will add will be understated as well.
Answer:
The answer is C.
Explanation:
Macroeconomics is the study of the economy as a whole, unlike microeconomics which is the study of the individual firms/markets.
Macroeconomics focuses on the standard of living, unemployment rate, inflation rate etc. and how this affects the whole economy.
Option A is wrong because it is the microeconomics and not macroeconomics that studies the market and the firm.
Option B and D are wrong because these are for microeconomics
Answer:
Date General Journal Debit Credit
Sept 15 Stock dividend $2,342,400
(1,200,000*8%*24.4)
Common Stock dividend distributable $480,000
(1,200,000*8%*5)
Paid in capital in excess of par- $1,862,400
Common Stock
Oct 1 No Journal entry
Oct 10 Common Stock dividend $480,000
distributable
Common Stock $480,000
