Answer:
a.
Explanation:
A bank reconciliation refers to the balancing the company's accounting records (the books) in regards to the cash accounts of that company, with the information from the bank statements that they have. Based on this information, it can be said that A bank reconciliation should be prepared to explain any difference between the depositor's balance per books with the balance per bank. Otherwise these inconsistencies may be considered as fraud.
A bank reconciliation should be prepared to explain any difference between the company's balance per books with the balance per bank.
Explanation:A bank reconciliation should be prepared to explain any difference between the company's balance per books with the balance per bank. The purpose of a bank reconciliation is to ensure that the company's records match the bank's records, taking into account any discrepancies such as outstanding checks or deposits in transit. This process helps to identify errors or fraudulent activity and ensures the accuracy of financial records. Bank reconciliations are typically prepared by the company's accounting or finance department.
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To automate routine tasks to help firms search for and filter information for use in electronic commerce and supply chain management a firm would most likely use:_________
A. genetic algorithms.
B. CAD systems.
C. fuzzy logic systems.
D. intelligent agents.
Answer:
D.
Explanation:
According to my experience in the field of information technology, it can be said that the firm would most likely use intelligent agents. These are artificial intelligence coded entities which are completely autonomous and manage and filter through information to complete certain tasks in order to achieve company goals. Which in this scenario they would use the information towards electronic commerce and supply chain management.
Answer:
(D) Intelligent agents
Explanation:
(A) Genetic algorithms are a form of Artificial Intelligence used for sorting the best solution to a business problem.
(B) CAD (Computer-aided design) systems are used by designers to derive an appropriate business design
(C) Fuzzy Logic systems are not used to automate routine tasks for firms
(D) Correct√
Intelligent Agents are specifically designed for the purpose of doing more than the regular duties of a computer - reading, storing and retrieving information.
Intelligent Agents were created to help in the running of office operations and e-commerce activities of a firm
Ecology Co. sells a biodegradable product called Dissol and has predicted the following sales for the first four months of the current year: Jan. Feb. March. April. Sales in units 3,500 4,600 5,700 4,300 Ending inventory for each month should be 20% of the next month's sales, and the December 31 inventory is consistent with that policy. How many units should be purchased in February?
Answer:
4,820 units
Explanation:
The computation of the purchased units in February month is shown below:
= Sale units + ending inventory units - beginning inventory units
where,
Sale units is 4,600 units
Ending inventory units = 5,700 units × 20% = 1,140 units
Beginning inventory units = 4,600 × 20% = 920 units
Now put these units to the above formula
So, the units would equal to
= 4,600 units + 1,140 units - 920 units
= 4,820 units
In class, we considered the way in which value-pricing is used by firms like McDonald's to provide more value to consumers. In general, this one useful approach to get consumers' attention for our product. However, as discussed, a practical problem can arise if: a. The COSTS for ingredients may rise, so that the firm cannot produce a profit at the value-priced amount. b. COMPETITION can charge us with illegal price competition. c. Consumer groups accuse us of caring more about profits than about our consumers' health. d. Managers cannot calculate the value price in the store e. as a practical matter, we pointed out that value-pricing always reduces our profits.
Answer:
A) The COSTS for ingredients may rise, so that the firm cannot produce a profit at the value-priced amount.
Explanation:
Value pricing strategies usually work because consumers always like good offers and what better offer than a cheap price. But for any company to be able to sell at very low prices, the inputs they use including labor, materials and capital must be cheap also. That is the reason why McDonald's pays a low salary and they have to buy the cheapest possible ingredients.
If the price of any of their inputs increases significantly, then they will start losing money if they keep their prices low. If we want to pay $1 for a hamburger, then we cannot expect it to be made with the best ingredients available or by the best paid chefs in the world.
On July 1, 2019, Montana Company has bonds with balances as shown below. Bonds Payable 66,000 Discount on Bonds Payable 3,800 If the company retires the bonds for $71,150, what will be the effect on the income statement?
Answer:
Loss on the retirement of $4,750
Explanation:
The following have the effect on the income statement which is a loss on the retirement and it amounts to $4,750
It is computed as:
Loss on retirement = Retirement value of the bonds - Issued price of the bonds
= $71,150 - $66,400
= $4,750
Working Note:
Issued Price of bonds = Face value - Discount on bonds payable
= $70,000 - $3,600
= $66,400
The retirement of Montana Company's bonds for $71,150 will result in a loss of $8,950, negatively impacting the income statement as this amount exceeds the carrying value of the bonds.
Explanation:On July 1, 2019, Montana Company had bonds payable of $66,000 and a discount on bonds payable of $3,800. If the company decides to retire the bonds for $71,150, the effect on the income statement will be determined by calculating the loss or gain on this retirement. Firstly, we need to adjust the carrying amount of the bonds by subtracting the discount from the bonds payable, resulting in a carrying amount of $62,200 ($66,000 - $3,800). When the bonds are retired for $71,150, this results in a loss because the retirement cost is greater than the carrying amount. The loss calculated would be $8,950 ($71,150 - $62,200), which will negatively affect the income statement as an expense.
At December 31 of the current year, Cart Company has a $16,000 Notes Receivable from a customer. Interest of 5% has accrued for 9 months on the note. What will be reported on the Balance Sheet?
Answer: $23,200 as total current asset for the period
Explanation:
Note Receivable has a value $16,000
Interest on Note = 5%
Accrued for 9 months
Yearly Interest accrued = 16,000*5%*12= 9,600
Interest for 9 months = 9600/12*9 = 7,200
Balance sheet Extract
Other Income
Int Accrued on Note Receivable $7,200
Current Asset
Note Receivable $16,000
Int Accrued on Note Receivable $7,200
Total Current Asset $23,200
Bingerton Industries uses a perpetual inventory system. The company began the year with inventory of $93,000. Purchases of inventory on account during the year totaled $318,000. Inventory costing $343,000 was sold on account for $536,000. Record transactions for the purchase and sale of inventory.
Answer:
Explanation:
The journal entries are shown below:
1. Merchandise Inventory A/c $318,000
To Accounts payable A/c $318,000
(Being the inventory is purchased on credit)
2. Accounts receivable A/c Dr $536,000
To Sales revenue A/c $536,000
(Being inventory is sold on credit)
3. Cost of goods sold A/c Dr $343,000
To Merchandise inventory A/c $343,000
(Being inventory is sold at cost)
An individual's ecological footprint is equivalent to the:
a.total amount of food consumed by that individual.
b.total amount of energy used by that individual.
c.total amount of carbon emissions from that individual's car.
d.amount of land required to provide all the resources used by that individual.
e.All of these choices are correct.
Answer: option D is correct
Explanation:
This is the biologically productive land that can sustain the individuals activities. It takes into account resources needed to produce goods and clean up it's waste.
An individual's ecological footprint is the total amount of land required to provide all the resources they use, and to absorb their waste. It is a comprehensive measure encompassing all areas of resource consumption and waste generation. In short, it reflects the true environmental impact of our lifestyle.
Explanation:An individual's ecological footprint refers to much more than simply the food they consume, the energy they use, or the emissions from their vehicles. It is a comprehensive measure that is most accurately represented as the amount of land required to provide all the resources (like food, water, energy) used by that individual, and to absorb the waste they generate. Therefore, the correct answer to your question is d. amount of land required to provide all the resources used by that individual.
This footprint is equivalent to how much of the Earth's resources we use and how much waste we create compared to how much the planet can regenerate and absorb. If everyone lived like an average American, we would need five Earths to support us!
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Corporations normally are financed by ______. One type of security consists of borrowing funds and is called a ________. The other main type of security consists of ownership in the corporation and is called a_________ , or equity security.
Answer:
securities
bond
stock
Explanation:
Corporations source their finances from issuing securities. If they borrow from banks or other corporations or from investors, then that is considered debt. They can also borrow debt by issuing bonds which are fixed securities which can either be paying coupons periodically or not. If they do not have debt financing, they can sell part of company ownership to investors by issuing stocks and pay dividends to them in return.
Graciellea is making a persuasive complaint at work. Which of theses sentences will be most effective in achieving goals?
a.If you can't be bothered with maintaining our equipment in good working order, how can I be confident that you care about your employees? I can't be bothered filing repeated re-pair requests either.
b.I have put up with a broken fax in Workroom 223 for three weeks, and I am just fed up with this waste of my time. Repair the fax or else!
c.Did you realize that Bill has still not fixed the fax in Workroom 223 despite the work re-quest I completed two weeks ago? Make Bill fix it soon.
d.For the past two weeks, fax machine No. 223- 51 has been unavailable to complete essen-tial business for 25 of our employees due to incomplete service.
Answer: If you can't be bothered with maintaining our equipment in good working order, how can I be confident that you care about your employees? I can't be bothered filing repeated re-pair requests either.
Explanation:
In order for Graciella's complaint to be persuasive enough she needs to relate her terrible daily experience at work and that of her colleagues, in an emotionally moving manner to her superiors she is filing the complaint to. While doing this the tone of writing is of utmost importance to drive home the message.
The most effective sentence for making a persuasive complaint at work is option d, which clearly communicates the impact of a malfunctioning fax machine on business operations and employees, without expressing frustration or assigning blame.
Among the options provided, the most effective sentence for making a persuasive complaint at work would be:
d. For the past two weeks, fax machine No. 223-51 has been unavailable to complete essential business for 25 of our employees due to incomplete service.
This sentence effectively communicates the problem without assigning blame or expressing frustration in an unprofessional manner. It focuses on the impact of the problem on business operations and a significant number of employees, making it a strong candidate for persuading management to take swift action.
The Austrian-company Wienerberger is the world's largest brickmaker. It had to use the management function of _____ when it integrated the employees and manufacturing facilities that it gained from a merger with a brickmaking company in Great Britain.
a. planning
b. controlling
c. directing
d. communicating
e. organizing
Answer: The correct answer is "e. organizing".
Explanation: It had to use the management function of organizing when it integrated the employees and manufacturing facilities that it gained from a merger with a brickmaking company in Great Britain.
They had to use the function of organizing to determine the appropriate way to distribute resources and organize employees in order to fulfill the plan and objectives.
Wienerberger, an Austrian firm, is the world's largest brick manufacturer. When it combined the people and manufacturing facilities it received from a merger with a brickmaking business in the United Kingdom, it had to apply the managerial function of organizing.
What is organizing?When it combined the people and manufacturing facilities it received from a merger with a brickmaking business in the United Kingdom, it had to apply the managerial function of organizing.
They needed to use the organizing function to figure out how to divide resources and organize employees in order to meet the plan's goals.
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During 2017, Ecuyer Industries reported cash provided by operations of $794,000, cash used in investing of $686,000, and cash used in financing of $190,000. In addition, cash spent for fixed assets during the period was $276,000. Average current liabilities were $650,000 and average total liabilities were $1,716,000. No dividends were paid. Based on this information, what was Ecuyer's free cash flow?
Answer:
$518,000
Explanation:
Data provided in the question:
cash provided by operations = $794,000
Cash used in investing = $686,000
Cash used in financing = $190,000
cash spent for fixed assets during the period = $276,000
Average current liabilities = $650,000
Average total liabilities = $1,716,000
Now,
Ecuyer's free cash flow
Particulars Amount
Cash provided by operations $794,000
Less: Cash spent for fixed assets during the period $276,000
==============================================================
Ecuyer's free cash flow $518,000
quizlit The advantages of bond exchanges (bond markets) include which of the following? (Check all that apply.)
Allows corporations to reduce the cost of long-term borrowing
Allows corporations to increase the cost of their debt Provides liquidity to creditors
Allows creditors to sell bonds prior to maturity Provides a place to exchange stocks
Answer:
Allows corporations to reduce the cost of long-term borrowing
Allows corporations to increase the cost of their debt Provides liquidity to creditors
Allows creditors to sell bonds prior to maturity Provides a place to exchange stocks
Explanation:
All of the above are advantages of bond exchanges or bond markets
If a perfectly competitive firm with constant returns to scale was reorganized as a monopoly, its monopoly price would be ________ the perfectly competitive price and its monopoly output would be ________ the perfectly competitive output.
Answer:
The correct answers are: greater than; less than.
Explanation:
In the perfect competition model, the nature of the scale returns poses serious problems, whatever the case considered. Sise assumes that the returns of scale are increasing, the supply of companies is infinite; if they are constant, the offer is null, infinite or indeterminate (equilibrium case); if they are decreasing, the profit of the companies is strictly positive in the balance '. In the latter case, if they could do so, companies would be interested in dividing themselves, without any limit, into entities as small as possible.
Customer World provides products and services to customers and allows customers to pay by credit card. On Thursday, a customer purchased a computer for $600 and used a credit card to pay. The credit card company charges Computer World a transaction fee equal to $0.20 + 1% of the total charge. What is the transaction fee Customer World must pay on this sale?
Answer:
$6.20
Explanation:
The computation of the transaction fee is shown below:
= 1% of the total charge + $0.20
= 1% × $600 + $0.20
= $6 + $0.20
= $6.20
Simply we calculated the total charge value and then added the given fee which is mentioned in the question.
Here, total charge means the purchase value of the computer which is purchased by the customer
A famous architect wants to build a modern community center building made completely of stainless steel that rises six stories and incorporates sharp angles and an irregular shape, and approaches the zoning commission about building it in Old Town, an area filled with traditionally styled buildings from the 1800s. In following the city’s ________, which require that the traditional aesthetics of Old Town be maintained, the city can deny the architect’s building permit for the proposed community center.
Answer: Zoning Ordinances
Explanation:
Here, in this particular case the architect requires the respective city's zoning ordinance in order to build the contemporary community center. Zoning ordinance can be easily described as the written rule or code and the law which further defines how a property in a particular geographic area can be utilized. These ordinances also specify whether the area can be utilized for the commercial or residential intention.
Shen manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash. On payday, he immediately goes out and buys as many goods as he can for himself for the next two weeks in order to prevent the money in his wallet from losing value. What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the of _______? inflation.a. menu costsb. shoe-leather costsc. unit-of-account costs
Answer:
b. shoe-leather costs
Explanation:
The shoe leather cost refer to the cost of time and effort to reduce the amount of cash you have with the idea of not losing the value of the money because of a high inflation. So, what people do immediately after they receive the money is to change it to a foreign currency or make purchases as its value is lost quickly. Acording to this, the situation explained is an example of shoe-leather costs.
________ involve the flow of merchandise through distribution channels, usually across international borders, other than those authorized or intended by the manufacturer or producer.
a. Chargebacks
b. Lift-outs
c. Gray-market goods
d. Exclusive dealing arrangements
e. Reverse auctions
Answer:
The correct answer is (C)
Explanation:
Gray market refers to items that are sold lawfully, however outside of the brand's consent. These items can hurt associations with wholesalers and harm item notoriety. Basic Gray market products incorporate cameras, vehicles, watches and even pharmaceuticals. At the point when a wholesaler or retailer is left with overabundance or old stock, they can decide to auction the stock at limited costs to different vendors. Those vendors then sell it in gray market, such goods, are called gray market goods
Other disclosures related to receivables are reported
a.on the income statement only.
b.on the face of the financial statements only.
c.in the financial statement notes only.
d.either on the face of the financial statements or in the financial statement notes.
Answer:
Correct option is (d)
Explanation:
Other disclosure related to receivables include further information on the amounts owed to the organization by debtors such as notes receivables and trade receivables. They are reported either on the face of financial statements in the balance sheet or as notes in the financial statements.
This includes additional information about the receivables such as risk associated with it or market value of receivables.
Among the advantages of cycle counting is that it: allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory. makes the annual physical inventory more acceptable to management. does not need to be performed for less expensive items. does not require the detailed records necessary when annual physical inventory is used. does not require highly trained people.
Answer:
Allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory
Explanation:
Cycle counting is a prominent stock tallying arrangement that enables organisations to include various things in various zones inside the distribution centre without calculating the whole stock. Cycle checking is an inspecting method where the count of a specific number of things derives the mean the entire distribution centres. It also helps in the identification of errors.
Cycle counting offers advantages such as rapid error identification and maintains accurate records, making annual inventories more manageable and reliable. It requires detailed records just like annual inventories and needs to be performed on all inventory items for effectiveness.
Explanation:Among the advantages of cycle counting is that it allows for a more rapid identification of errors and enables quick remedial action, which can be more efficient than what is possible with an annual physical inventory. This ongoing process can help make the annual physical inventory more acceptable to management, as it ensures that inventory records are accurate throughout the year. However, it's important to note that cycle counting still requires detailed records similar to annual physical inventory and needs to be performed even for less expensive items to maintain accuracy. While it may not require highly trained people, sufficiently trained personnel are essential to perform cycle counting effectively, especially when identifying and correcting errors.
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Vansel Inc. retains most of its earnings. The company currently has earnings per share of $11. Vansel expects its earnings to grow at a constant rate of 2 percent per year. Furthermore, the average PE ratio of all other firms in Vansel's industry is 12. Vansel is expected to pay dividends per share of $3.50 during each of the next three years. If investors require a 10 percent rate of return on Vansel stock, a fair price for Vansel stock today is $____.
a. 113.95
b. 111.32
c. 105.25
d. none of the above
Answer:
A. $113.95
Explanation:
Vansel's expect that the EPS will grow by 2% annually, the earnings per share in 3 years are forecast to be:
Earnings in 3 years = $11×(1+2%)³ = $11.67
The forecasted earnings per share can be multiplied by the PE ratio of the firm’s industry to forecast the future stock price. The average PE ratio of all other firms in Vansel industry is 12, the stock price in three years can be forecast as follows:
Stock price in three years = (Earnings in three years)×(PE ratio of industry) = $11.67×12 = $140.08
This forecasted stock price can be used along with expected dividends and the investor’s required rate of return to value the stock today. Vansel pay a dividend of $3.5 per share over the next three years and the investor’s required rate of return (Re)is 10%, then the present value of expected cash flows to be received by the investor is:
PV = Dividend₁/(1+Re)¹ + Dividend₂/(1+Re)² + Dividend₃/(1+Re)³ +Stock price in three years/(1+Re)³ = $3.5/(1+10%) + $3.5/(1+10%)² + $3.5/(1+10%)³ + $140.08/(1+10%)³ = $113.95
Perfect competition is characterized by all of the following except A. homogeneous products. B. sellers are price takers. C. heavy advertising by individual sellers. D. horizontal demand for individual sellers.
Answer:
c they don't have enough money
Premier Co. produces park equipment and is currently producing 10,000 park benches annually. A supplier has offered to produce the bench for Premier Co. for $500 per bench. Premier Co. incurs unit-level costs of $490 per unit. Premier also spends $50,000 on product design each year and incurs $100,000 of facility-level costs. Calculate the avoidable production cost for Premier Co. to produce 1 bench.
Final answer:
Premier Co.'s avoidable production cost to produce one park bench is $490, which represents the direct unit-level costs associated with producing each bench. Other costs such as product design and facility-level costs are not considered avoidable as they would be incurred irrespective of production decisions.
Explanation:
The question asks to calculate the avoidable production cost for Premier Co. to produce one park bench, given that the company currently produces 10,000 benches annually, incurs unit-level costs of $490 per bench, spends $50,000 annually on product design, and has facility-level costs of $100,000.
Avoidable costs are those that can be saved if the company stops producing the benches. The unit-level cost of $490 per bench is the direct cost of producing each bench and is thus considered an avoidable cost. However, the product design costs of $50,000 and facility-level costs of $100,000 are sunk costs and not avoidable in the short term as they are incurred regardless of the number of benches produced. Thus, the avoidable cost for producing one bench is $490, only considering the unit-level costs.
Karina is entering into a business transaction what is referred to as off-balance-sheet financing, the company. The company is in violation of generally accepted accounting principles. is attempting to conceal the debt from shareholders by having no information about the debt included in the balance sheet. wishes to confine all information related to the debt to the income statement and the statement of cash flow. can enhance the quality of its financial position and perhaps permit credit to be obtained more readily and at less cost.
Answer:
Explanation:
Off-balance sheet (OBS) financing is an accounting practice whereby a company does not show a liability or debt on its balance sheet. It is used to impact a company's level of debt and liability.
An inventory system answers two important questions: when to order and how much to order. Which of the following statements correctly explains how a Q System (continuous review system) or a P system (periodic review system) answers these questions? A. Under a Q System, a fixed quantity is ordered every P time period. B. Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R. C. Under a P system, a fixed quantity is ordered when the inventory position reaches the reorder point R D. Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods.
Answer:
The answer is letter D
Explanation:
Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods.
Under a Q System, orders are placed when inventory drops to a reorder point R, replenishing it to the target level T. A P System orders at fixed time intervals P, with order quantities varying to reach the target level T.
The correct statement explaining how a Q System (continuous review system) and a P System (periodic review system) answer the questions of when to order and how much to order is: B. Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R.
In a Q System, the inventory is continuously monitored, and when the inventory level drops to a predetermined reorder point R, a fixed quantity Q is ordered to bring inventory up to the target level T. This approach responds promptly to inventory level changes, maintaining service level and minimizing stockouts.
Contrastingly, D. Under a P system, an order is placed to replenish the inventory position up to the target level T every P time periods. In a P System, inventory is checked at fixed intervals P, and the order quantity varies depending on the current inventory level and the target inventory level T. This system is suited to controlling inventories with less frequent reviews and tends to batch orders, which may result in larger inventory holdings.
Xavier, 16, invites a group of his high school friends to swim in a neighbor's pool late at night while that neighbor is away. They climb the fence and jump in, playing wildly and loudly in the water. Just a few minutes later, the police arrive. How does adolescent brain development help explain Xavier's poor decision making?
A. His prefrontal cortex is underdeveloped.
B. His amygdala is underdeveloped.
C. The regions regulating his emotions are underdeveloped.
D. His limbic system is underdeveloped
Answer:A - His prefrontal cortex is underdeveloped.
Explanation: For Xavier to be able to make such a decision as to invite his friends to swim in his neighbors pool while we was out at night shows that his prefrontal cortex is underdeveloped.
Prefrontal cortex is the frontal part of the frontal lobe in the brain. This part of the brain is responsible for some of our behaviours like decision making, social behaviour moderator and personality expressions.
This is to say that Xavier's behaviour was controlled by his prefrontal cortex that is still developing.
There are many options available to consumers when it comes to breakfast cereals. So, if Kellogg's significantly increases the price of Rice Krispies, consumers are more apt to buy alternate cereals instead. This illustrates which concept?1) cross-price elasticity
2) the income effect
3) the target return effect
4) the substitution effect
5) the break-even point
Answer:
4) the substitution effect
Explanation:
When a product's change in price (increase) directly influences the consumers to switch to lower-cost alternatives, it is called the substitution effect.
Usually, it is applicable for similar kinds of FMCG goods. Of course, personal spending power and consumer habits are of great importance too, but the substitution effect best describes what happens with the consumer choice when the price of a particular good increases.
The substitution effect describes situations when the product's price increases, but the spending power remains on the same level. If the change in spending power was the input for consumer choice, than it would be the income effect.
The nominal exchange rate
a) is the difference between the interest rate in one country and the interest rate in another country.
b) the rate at which a bond may be exchanged for currency.
c) the rate at which a stock may be exchanged for currency.
d) the price of one country's currency in terms of another's.
Answer: D: the price of one country's currency in terms of another's.
Explanation: the number of units of a local currency required to exchange for another number of units of a foreign currency is called the nominal exchange rate.
For example, if £1 = $1.5, it means that one pound is required to exchange for two American dollar.
Kela Corporation reports a net income of $450,000 that includes a depreciation expense of $70,000. Also, cash of $50,000 was borrowed on a 5-year note payable. Based on this data, the total cash inflows from operating activities are:
a. $380,000.
b. $470,000.
c. $520,000.
d. $570,000.
Answer:
option (c) $520,000
Explanation:
Data provided in the question:
Net income = $450,000
Depreciation expense = $70,000
Amount borrowed = $50,000
Now,
Here out of the given transactions, the amount borrowed is a financing activity.
Therefore,
The total cash inflows from operating activities
= Net income + Depreciation expense
= $450,000 + $70,000
= $520,000
Hence,
The correct answer is option (c) $520,000
Of 1000 homeowners insured with Crown Insurance, 250 live in a flood plain, 150 live in an area with frequent tornadoes, 100 live in earthquake prone regions, and the remaining 500 reside in small communities located in less hazardous regions. Which of the following will likely apply to the low-risk group of homeowners? Group of answer choices the low and medium-risk groups will pay less than the high-risk group those in the low-risk group will be discouraged from buying home insurance. they must buy insurance and pay more than the actuarially fair amount for their risk group those in the low-risk group will pay less than both the medium-risk and high-risk group
Answer: The answer is (B)
Explanation: For clarity, the options are:
(A) the low and medium risk groups will pay less than the high risk groups
(B) those in the low risk groups will be discouraged from buying home insurance
(C) they must buy insurance and pay more than the actually fair amount for their risk group
(D) those in low risk groups will pay less than both the medium risk and high risk groups
EXPLANATION:
(A) can't be the answer because in Insurance, you are not necessarily allowed to pay according to the exact risk you forsee. The company will have static amounts for each type of insurance e.g. home insurance, car insurance, etc. So, the low and medium risk groups will pay the same amount as the high risk groups once they have decided to insure their homes.
(B) is correct because low risk home residents who haven't taken up a home insurance will see that they don't really benefit from it as much as high risk home residents do. So they will be discouraged to take up a home insurance.
(C) the key word here is "must" and there is no enforcement when it comes to taking up an insurance plan
Answer:
the answer is B
Explanation:
Your client performed the physical count of inventory as of November 30, one month prior to year-end. Subsequently, your client closed the sales journal on 12/29/XX, two days before year-end, and reported those two days' credit sales in January of the next year. Assuming the client uses a perpetual inventory system, which of the following is most likely to be overstated relating to the year XX financial statements?
A. Sales.
B. Cash.
C. Inventory.
D. Accounts receivable.
Answer:
The answer is C, that is, for the inaccurate accounting recording described in the question, inventory is most likely to be overstated.
Explanation:
For the year XX, any sales happening in the last two days of the year must be recorded in the year XX. However, as sales journal closes 02 days before year end, these recordings will be recorded in (XX +1) year.
As a sales transaction happens, Cash and Account Receivable go up (Dr), Sales also increases (Cr) while Inventory decreases (Cr).
With the early closing of sales journal, as explained above, if any sales takes place in the last two days of the year, Cash and Account Receivable and Sales for the year XX will be understated (because they are inaccurately recorded in the (XX+1) year ) and Inventory will be understated (also because they are inaccurately recorded in the (XX+1) year).