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3 years ago

Is accounting conservatism appropriate

Business

1 answer:

nata0808 [166]3 years ago

8 0

Answer:

Yes, accounting conservatism is appropriate because it makes firms more cautious when registering and reporting financial information. This increased cautiousness is likely to make accounting information more accurate.

Under the principle of accounting conservatism, losses are registered when they are found to be probable, while earnings are only added when they have been fully realized. As a result, this principle results in prudent and more trustworthy financial information for all stakeholders.

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A prepayment may be recorded in prepaid rent, a balance sheet account. The alternative method to record the prepayment is to deb

Snowcat [4.5K]

Answer:

Rent, expenses

Explanation:

A prepayment may be recorded in prepaid rent, a balance sheet account. The alternative method to record the prepayment is to debit the rent of expense account.

6 0

3 years ago

$5,000 is invested in two different accounts yielding 3% and 3.5% interest. The interest earned on the two accounts is $155. How

Ne4ueva [31]

$4000 was invested at 3% interest.

<u>Solution:</u>

Assume that x and y represent the amount at 3.5% and 3% respectively. So, according to the given statements we get two equations,

$x+y=5000\rightarrow(1)\\\\3x+3.5y=15500\rightarrow(2)$

On multiplying equation (1) by 30 and equation (2) by 10 we get,

$30 x+30 y=150000\\\\30 x+35 y=155000$

On solving both the equations we get,

$\Rightarrow5y=5000\rightarrow y=\frac{5000}{5}\rightarrow y=1000\rightarrow(3)$

On substituting (3) in (1) we get,

$\Rightarrow x+1000=5000\rightarrow x=5000-1000\rightarrow x=4000$

Therefore, $4000 was invested at 3% interest and $1000 was invested at 3.5% interest.

6 0

4 years ago

Economic policy by changes in the taxing and spending of the federal government is called what?

lidiya [134]

It is called fiscal policy

3 0

3 years ago

Exercise 23-4 Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2017 sales forecast is as follo

mrs_skeptik [129]

Answer:

$\left[\begin{array}{cccccc}&Q1&Q2&Q3&Q4&Total\\$Sales&5,100&7,100&8,100&10,100&30,400\\$Ending Inventory&2,840&3,240&4,040&2,550&-\\$Producction Needs&7,940&10,340&12,140&12,650&43,070\\$Beginning&(2,040)&(2,840)&(3,240)&(4,040)&-\\$Punits to be produced&5,900&7,500&8,900&8,610&30,910\\\end{array}\right]$

Explanation:

ending inventory

Q1 = q2 sales x 40% = 7,100 x 40% = 2,840

Q2 = q3 sales x 40% = 8,100 x 40% = 3,240

Q3 = q4 sales x 40% = 10,100 x 40% = 4,040

Q4 = q1 next year x 40%

next year will be 25% than q1 of current year

Q4 = Q1 sales x 1.25 x 40% = 2,550

beginning of Q1 is a given 2,040. Then:

ending of Q1 = beginning of Q2 (when a quarter ends, another begins)

ending of Q2 = beginning of Q3

ending of Q3 = beginning of Q4

The sales plus the desired ending inventory will be all the units needed for the period.

Our beginning inventory subtract out productions needs, as those units are already in stock, we don't need to produce them.

6 0

3 years ago

A new equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. The investmen

Inessa [10]

Answer:

It is feasible. 16,012.47 dollars

Explanation:

We will calculate the present value of the increased productivity and the salvage value.

The productivity will be done with an ordinary annuity

while the salvage with a lump sum

$productivity \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

productivity: 10,000

n = 5 years

MARR = 10%

$10000 \times \frac{1-(1+0.1)^{-5} }{0.1} = PV\\$

PV $37,908

$\frac{Salvage}{(1 + rate)^{time} } = PV$

Salvage: 5,000.00

time 5 years

MARR = 10%

$\frac{5000}{(1 + 0.1)^{5} } = PV$

PV 3,104.61

Then we calcualte the NPV which si the sum of the cash inflow or cash savings after subtracting the investing cost at year zero:

Net present value: $37,907.8677 + $3,104.6066 - 25,000 = $16,012.4743

it wil be feaseble as his NPV is positive.

8 0

4 years ago