Option (d) the amount owed on a liability is correct.
Paying an amount on account reduces the amount owed on a liability.
<h3>What is liability?</h3>
- A liability is an obligation that a person or business has, typically financial in nature. Over time, liabilities are resolved by the transmission of economic advantages like cash, products, or services.
- There are various ways to define a liability's duration. The average duration (or mean term) of the liability is what is typically meant by the term "duration of liability" in actuarial valuation. In other terms, it refers to the typical rate of a liability's repayment.
- Liabilities can be used by businesses to increase liquidity if they are having cash flow issues. Most small and medium-sized enterprises lack the financial resources necessary to grow.
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Answer:
A progressive tax is one which charges more tax for those with higher income.
The amount of tax paid depends on the general income of the person.
Answer:
3 years and 4 months
Explanation:
Colby payback period = Investment in book and store / Annual cash income = $400,000 / $120,000 = 3.33 years = 3 years and (0.33 *12) months = 3 years and 4 months.
Therefore, the payback period for Colby is 3 years and 4 months.
Answer:
Annual depreciation= $24,000
Explanation:
Giving the following information:
Purchased equipment at the cost of $140,000. This equipment is estimated to have 5-year useful life. At the end of the 5th year, the salvage value (residual value) will be 20,000.
To calculate the annual depreciation, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
<u>Under the straight-line method, depreciation is the same in all years.</u>
Annual depreciation=(140,000 - 20,000)/5= $24,000
