Operating leverage is a measure of a company's fixed costs as a percentage of its overall costs. The breakeven point of a business and the anticipated profit margins on particular sales are determined using this formula. The above statement is True.
How does a firm's risk rise as a result of operating and financial leverage?
Higher fixed costs result in higher operating leverage, which increases sensitivity to changes in revenue. Since it suggests that existing profitability is less certain going forward, a far more sensitive operating leverage is regarded as riskier.
Operational leverage exists when a company's operating costs are fixed. Then, a rise in sales causes a more-than-proportional rise in ebit, and a fall in sales causes a more-than-proportional fall in ebit.
Therefore, when a firm has fixed operating costs, operating leverage is present.
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an oligopoly would tend to restrict output and drive up price if a. barriers to entering the industry are negligible. b. firms collude and behave like a monopoly. c. firms engage in informative advertising. d. firms produce a standardized product.
An oligopoly would tend to restrict output and drive up price if "firms collude and behave like a monopoly."
A limited number of companies compete in an oligopoly market and are aware of how their pricing and production strategies are interdependent. Because there are only a few number of businesses, each one has a respectable level of market power.When a small number of significant sellers or manufacturers dominate a considerable percentage of a market or an entire sector, the situation is referred to as an oligopoly. The desire to maximize profits frequently gives birth to oligopolies, which can lead to corporate cooperation.Oligopoly is a type of imperfect competition that is typically characterized as rivalry among a small number of parties. Therefore, oligopoly arises when there are two to ten vendors providing similar or distinct goods in a market. The market for cold drinks is a prime illustration of an oligopoly.Thus the correct answer is B.
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Which of the following is an example of a finite population in a queuing system?
a) People waiting to place their order at a fast food restaurant
b) People waiting in line in a back-office to drink water.
c) People waiting in line in a front-office to drink water.
d) Patients seeking help in a hospital emergency room
e) Taxpayers calling for assistance from the IRS
One example of the a finite population inside a queuing system is the department faculty waiting in line at the copier.
What is population and example?This could be made up of a grouping of persons, objects, occurrences, organizations, etc. Employ populations to draw any conclusions. inhabitants in Figure 1. All the students in a single school might well be considered a population. Each of the pupils who'd been registered at such a specific school at the time the data were being collected would be included.
Why is it called population mean?The population mean is the total group, dispersion, or population's determined average. It is determined by dividing the entire population of factors but by amount of all demographic variables.
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For a given population and a given quantity of labor employed, what will happen to aggregate production and income per capita if there is an increase in a nation’s capital stock?
An increase in a country's capital stock will result in a rise in aggregate production and income per capita for a given population and a given quantity of labor employed.
What is Per Capita Income?Per capita income is the amount of money that each person makes within a nation or geographic region. In order to calculate the average income per person in a region and to assess the population's level of living and quality of life, per capita income is used. The per capita income of a country is derived by dividing the national income by the population of the country.
Every person, including newborns, is included in the population when calculating per capita income. This contrasts with other popular measures of an area's prosperity like household income, which classifies all individuals living in a single home as a household, and family income, which classifies individuals living in a single home who are related to one another through birth, marriage, or adoption as a family.
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A 71-year-old client calls her registered representative and asks him to wire $10,000 to an offshore account. The rep asks the reason and she responds that she won money in a lottery and this is to pay the taxes. The registered representative is concerned that this might be a case of senior exploitation and should
A)
get the wire instructions and escalate this to his supervisor.
B)
contact the client's trusted contact person on this account and inform them of the request.
C)
wire the money as instructed.
D)
refuse to wire the money.
The registered representative is concerned that this might be a case of senior exploitation and should contact the client's trusted contact person on this account and inform them of the request. Correct option is B.
A 71-year-old client calls her registered representative and asks him to wire $10,000 to an offshore account. The rep asks the reason and she responds that she won money in a lottery and this is to pay the taxes. The registered representative is concerned that this might be a case of senior exploitation and should contact the client's trusted contact person on this account and inform them of the request.
In this case A being a client qualifies as a designated adult since they are 65 years of age or older. As a result, the company have to make an effort to find out who will serve as the account's reliable contact. The registered representative should always get in touch with the contact person if they have any reason to believe something is strange.
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Which of the following is a traditional tool used by the Fed during recessions?
A. quantitative easing
B. higher interest rates
C. open market operations
D. coins and paper currency
The option that is a traditional tool used by the Fed during recessions is open market operations. (Option C)
What is an open market operation?
The Fed is the Central Bank of the United States. One of the functions of the Fed is to ensure financial stability. Recession is when the gross domestic product of a country for four consecutive quarters is negative.
When there is a recession, the Fed would want to increase the money supply in the economy. An increase in the money supply would fuel economic activities. One of the ways that money supply can be increased is through an open market purchase. An open market purchase would increase the money supply in the economy and should boost the economy out of a recession.
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The excess of expected sales over the sales level at the break-even point is known as the: ?7 Multiple Choice 2 points Sales turmover Profit margin. Contribution margin. Relevant range Margin of safety
The excess of expected sales over the sales level at the break-even point is known as the Margin of safety.
When a stock is worth more than its current market price, one should purchase it using the margin of safety. This is the main tenet of the value investing school of thought, which promotes capital preservation as the first investing guideline. Benjamin Graham advised investors to consider overlooked or unpopular companies with low P/E and P/B ratios. To determine whether businesses have hidden assets (such as investments in other companies) that may go unreported by the market, one need also examine financial statements and footnotes.
The investor is shielded by the margin of safety against both bad choices and market downturns. The margin of safety allows the investor leeway for investment because it is challenging to determine fair value with accuracy.
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which of the following is most important to the daily operations of a business?
The correct option is C. Cash. Cash is another name for money. Bank accounts and marketable securities, such as government bonds and banker's acceptances, are typically included in the definition of "cash" in a business context.
Cash is defined in economics as money that is present in the form of coins and banknotes. Cash is defined as current assets in bookkeeping and financial accounting, which include currency or currency equivalents that may be obtained immediately or almost immediately (as in the case of money market accounts). Cash is viewed as a reserve for payments, as a safety net in the event of a structural or unavoidable negative cash flow, or as a means of preventing a decline in the financial markets. Money or coins that are legal tender can be used to pay for goods, debts, or services. Additionally, as stated by a corporation, it occasionally includes the worth of assets that can be quickly converted into cash.
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as outlined by branding expert kevin lane keller, the benefits of strong brand equity include all of the following except: a) greater loyalty. b) more vulnerability to marketing actions. c) less vulnerability to marketing crises. d) more inelastic consumer response to price increases.
As outlined by branding expert Kevin Keller, the benefits of strong brand equity include all of the following except: more vulnerability to marketing actions.
When compared to a generic equivalent, brand equity is the value premium that a company generates from a product with a recognizable name. Companies can build brand equity for their products by making them memorable, easily recognizable, and superior in terms of quality and dependability.
It is the amount of sway a brand name has in the minds of consumers, as well as the value of having a brand that is easily identifiable and well remembered.
Hence, the correct answer is "B".
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universal company reported revenue in its income statement for the year of $350,000. the beginning and ending balances of accounts receivable, gross were $35,000 and $42,000, respectively. what amount would be reported as cash receipts from customers in the operating activities section of the statement of cash flows using the direct method?
The amount to be reported as cash receipts in the operating activities section of the cash flows is $3,57,000
The computation of the cash flows from operating activities to be reported on the statement of cash flows for the year is computed below:
= Net income reported on the income statement + decrease in account receivable
where,
Net income reported = $3,50,000
And, the decrease in Debtors is $7,000 ($42,000 - $35,000)
So, the cash flow from operating activities is:
= $3,50,000 + $7,000
= $3,57,000
The decrease in account receivable means that more cash has come so it would be added and the same is shown in the above calculation.
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in the context of the characteristics of digital marketing, interactivity is defined as the ability of
In the context of the characteristics of digital marketing, interactivity is defined as the ability of the control a customer has over the content they view, as well as its rate and exposure.
Digital marketing, a subset of marketing, is the practise of promoting goods and services through the use of the Internet and other online-based digital platforms, including mobile phones, desktop computers, and other digital media and platforms. As a result of its development in the 1990s and 2000s, brands and companies now employ technology differently for marketing. The term "digital marketing" encompasses non-Internet channels that offer digital media, such as television, mobile phones, callback, and on-hold mobile ring tones. Digital marketing is distinct from online advertising since it includes non-Internet channels.
Using the internet and other digital communication channels, digital marketing, also known as online marketing, is the promotion of businesses to reach out to potential customers. Text and multimedia messages are also considered a form of marketing, in addition to email, social media, and web-based advertising.
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when there is , businesses and consumers can spend and invest with confidence. as they spend and invest with confidence, more goods and services are produced and more workers are hired, which moves the economy toward employment.
Businesses and consumers can spend and invest with confidence is as they spend and invest with confidence.
Invest is put money into financial schemes, shares and property with the predicted and expectation of achieving a profit.
If consumers are very confident, they will buy lots of shares of a particular firm in terms of goods and services. In other words, they will spend a lot of money. However, If their confidence is low, they will spend less and save more.
If a business has low levels of confidence in the economy there will be lower levels of investment and so lower economic growth that leads company get less hired worker due to the revenue generate by the company.
In business confidence if uncertainty about the future can reduce confidence and means that firms may postpone their investment decisions until confidence returns.
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in which type of indirect measurement approach to measuring the relative importance of consumers' evaluative criteria are consumers presented with several descriptions of alternatives and asked to rank all of them in terms of his or her preference for those combinations of features? group of answer choices perceptual mapping regression analysis factor analysis conjoint analysis cluster analysis
Perceptual mapping is the type of indirect measurement approach to measuring the relative importance of consumers' evaluative criteria are consumers presented with several descriptions of alternatives and asked to rank all of them in terms of his or her preference for those combinations of features.
What is Perceptual mapping?Perceptual mapping refers to the graphs that businesses use to show how consumers perceive different items, products, or brands. By collecting aggregated consumers data, we create an overview of how key users understand the relative positions of various products or brands within the larger ecosystem. Perceptual Mapping is a charting technique used by property marketers who seek to visually represent the perception of a customer or potential consumers . Brand positioning is influenced more by consumers perceptions than by companies. Perception Mapping are charts that represent what consumers think about products and services.It can reflect not just your offer, but what you think of other brands and even your competitors and products.To learn more about Perceptual mapping from the given link :
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property ownership in the united states is based on which type of system? amunal b. allodial c. fedual d. governmental
The real property system under the common law is known as “the estate system.” An estate is defined as an interest in real property.
What is the most common form of ownership in the US?
The most typical type of legal structure for small firms is the sole proprietorship. Taxation: Pass-through taxation is available to a sole proprietorship. The company does not submit a tax return. Private property rights are essential to the functioning of a capitalist economy and to its legal safeguards.
Since the free exchange of products and services between diverse parties is the foundation of capitalism, no one has the right to trade something that they do not own.
Whether a resource is controlled by the government or by private persons, a property right is the only power to decide how it is utilised. Society affirms the uses chosen by the property right holder through coercion from the government and social exclusion.
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which of the following is true about learning in organizations? question 45 options: about 10% of knowledge in organizations is tacit about 90% of knowledge in organizations is tacit
This is also true of learning within organizations approximately 90% of knowledge within organizations is tacit.
Any organization's tacit knowledge is ingrained and synthesized to a degree of about 90%. It has a significant impact on how effectively the knowledge is used across businesses.
Business-specific expertise is used in the workplace as tacit knowledge. It may also cover the abilities required to successfully negotiate customer requirements or close a sales contract. These traits develop as a result of certain workplace experiences, and they aren't always simple to convey to new team members.
Tacit knowledge is information you have learned via practical application in both your personal and professional lives. Because it is influenced by our individual views and ideals, it is frequently subjective, informal, and challenging to discuss or express.
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the demand for money will shift to the right as a result of (multiple answers are accepted) select an answer and submit. for keyboard navigation, use the up/down arrow keys to select an answer. a an increase in gdp. b an increase in the interest rate. c a decline in the interest rate. d an increase in wealth.
The demand for money will shift to the right with an increase in nominal GDP. So option a. is correct.
An increase in GDP will raise the demand for money because people will need more money to make the transactions necessary to purchase the new GDP. In other words, real money demand rises due to the transactions demand effect.
Money supply refers to all the currency and other liquid instruments in a country's economy. Gross domestic product (GDP) is a measurement of the total value of the finished goods and services produced within a country's borders within a specified period of time.
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Which of the following is NOT one of the four reasons that we study OM?
A. we want to know how goods and services are produced
B. it is one of the three major functions of any organization
C. we want to understand what marketing managers do
D. it is such a costly part of an organization
A. Want to know how goods and services are produced is not one of the four reasons that we study OM.
Studying Operations Management (OM)Studying Operations Management (OM) is a critical part of understanding how organizations operate. OM focuses on the coordination of activities, the use of resources, and the creation of value. There are four main reasons why we study OM.
We study OM to understand how organizations obtain resources. This includes:
Both physical resources such as raw materials and labor, as well as intangible resources such as financial capital, technology, and information. By understanding how organizations acquire their resources, we can better anticipate their needs and opportunities.Learn more about Studying Operations Management at: https://brainly.com/question/14598400
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during the 2021 fiscal year, donckers inc. was forced to sell one of its properties to the local government. the land had a carrying value of $150,000 but donckers received $160,000 from the sale, thus resulting in a gain of $10,000. if donckers uses the indirect method to prepare its yearly statement of cash flows, it should adjust for the effects of this sale by
In the indirect approach, non-cash items are added to and subtracted from the cash flow statement after starting with net income on an accrual basis to reconcile.
When is the statement of cash flows prepared using the indirect method?The statement of cash flows for the indirect method starts with net income or loss and then adds or subtracts from that amount non-cash revenue and expense elements to arrive at cash flow from operating activities.
When is the statement of cash flows prepared using the indirect technique if accounts receivable?In order to determine the amount of cash created by operations, the indirect technique for preparing the statement of cash flows adjusts net income with changes in balance sheet accounts.
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compared to financial accounting reports, management accounting reports might include information about:
The information created through financial accounting is entirely historical; financial statements contain data for a defined period of time. Managerial accounting looks at past performance and creates business forecasts.
Two of the four biggest branches of accounting are financial accounting and managerial accounting (e.g. tax accounting and auditing are others). The financial and managerial approaches to accounting are very different, despite numerous parallels in method and application. These variations mostly relate to target audiences, accounting standards, and compliance.
Identification, measurement, analysis, interpretation, and communication of financial information to managers for the pursuit of an organization's objectives are all part of managerial accounting.
Financial accounting entails documenting, compiling, and disclosing to the public or regulators the flow of transactions and economic activity resulting from business operations through time.
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jacob does not want to control his workers. he wants them to manage themselves. what kind of leader he is?
Jacob does not want to control his workers. He wants them to manage themselves. Jacob is showing laissez-faire leadership
Laissez-faire leadership takes a hands-on approach to leadership and gives others the freedom to make decisions. Leaders continue to provide teams with the resources and tools they need to succeed, but they are largely uninvolved in day-to-day operations.
Is laissez-faire leadership good?Like any leadership style, laissez-faire has its benefits. It promotes personal growth. Employees are given the opportunity to take action because leaders are very hands-on in their approach. This leadership style creates an environment that fosters growth and development.
What are the characteristics of a laissez-faire leader?Laissez-faire leaders have an attitude of trust and trust toward their employees. Don't micromanage or interfere, give too much direction or guidance. Instead, laissez-faire leaders enable employees to leverage their creativity, resources, and experience to achieve their goals.
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Aurora township is asking all of its citizens to chip in and donate money to build a new library. tommy thinks he already pays enough money in taxes, so he chooses not to donate. he knows that even if he does not contribute he will be able to use the library once it is built. This is an example of:
a. Adserve selection
b. The free rider problem
c. Asymmetric information
d. Tragedy of the commons
e. Moral hazard
Since Tommy knows that even if he does not contribute he will be able to use the library once it is built, this is an example of: B. The free rider problem.
What is the free rider problem?In Economics, the free rider problem can be defined as a type of market failure and burden that typically occurs when people who benefit from public goods (products) or shared resources refuse to pay for them or financially contribute to their development.
This ultimately implies that, a free rider problem simply refers to a type of problem that typically exists or arises when people who cannot be excluded from using a good (product) choose not to pay for it.
In this context, we can reasonably infer and logically deduce that the refusal of Tommy to donate money to build a new library because he knows he would be able to use it once it is built, is an example of the free rider problem.
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Starting from monthly sales data, if you wish to get weekly sales data, use the feature. a slice and dice ® O b. drill down O c.extract data O d. roll up Hide Feedback Incorrect
Starting from monthly sales data, if you wish to get weekly sales data, use the b. drill down feature.
In the field of computer studies, when we want to move to more specified data rather than the general one, then the drill-down feature is used.
Monthly sales data will be generalized data about the sales that were made ina given month. In order to know about the weekly sales in that month, we need to use the drill-down feature.
Using the drill-down feature, we will get to know the weekly sales that were made in each week of the month. By using the drill-down feature, everyday sales can also be known.
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assuming the projects are independent, which one(s) would you recommend? -select- if the projects are mutually exclusive, which would you recommend? -select- notice that the projects have the same cash flow timing pattern. why is there a conflict between npv and irr?
The present value of a flow of payments from a business, project, or investment is determined using net present value (NPV). It is the distinction between the current value of cash inflows and outflows over a given time period.
a. The NPV for the given question is calculated and attached in the form
of an image. The following computations are as under
IRR: IRR is the rate at which present value of cash inflows is equal present value of cash outflows.
Project A : 9000 = 3000/ (1+r)^1 + 3000/ (1+r)^2 + 3000/ (1+r)^3 + 3000/ (1+r)^4 + 3000/ (1+r)^5
Solving for r we get, IRR = 19.86%
Project B : 27000 = 8400/ (1+r)^1 + 8400/ (1+r)^2 + 8400/ (1+r)^3 + 8400/ (1+r)^4 + 8400/ (1+r)^5
Solving for r we get, IRR = 16.80%
MIRR = [Square root of (Present value of cash flows/ Initial Investment)] - 1
The present value of cash flows are calculated above in the table
MIRR Project A = [Square root of 10299.24/9000] - 1 = 1.0697 - 1 = 6.97%
MIRR Project B = [Square root of 28837.88/27000] - 1 = 1.0335 - 1 = 3.35%
Payback period is the number of years in which the initial investment is recovered.
Payback period A = 9000 /3000 = 3 years
Payback period B = 27000 / 8400 = 3.21 years
Discounted Payback period:
As per the NPV table above,
For project A, amount recovered upto 4 years = $8741.14, Balance to be recovered = $9000 - $8741.14 = $258.86
Discounted payback period = 4 + 258.86 / 3000 = 4.09 years
For project B, amount recovered upto 4 years = $24475.18, balance to be recovered = $27000 - $24475.18 = $2524.82
Discounted payback period = 4 + 2524.82 / 8400 = 4.30 years
b. Both projects would be accepted since both of their NPV's are positive
c. If the projects are mutually exclusive, the project with the highest
positive NPV is chosen. Accept Project B.
d. Since the cash flow timing is the same , The conflict between NPV and
IRR occurs due to the difference in the size of the projects.
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Complete question:
A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows Project A $9,000 $3,000 $3,000 $3,000 $3,000 $3,000 Project B $27,000 $8,400 $8,400 $8,400 $8,400 $8,400
a. Calculate NPV for each project. Calculate IRR for each project. Calculate MIRR for each project. Calculate payback for each project. Calculate discounted payback for each project. Round your answers to two decimal places.
b. Assuming the projects are independent, which one(s) would you recommend?
c. If the projects are mutually exclusive, which would you recommend?
d. Notice that the projects have the same cash flow timing pattern. why is there a conflict between npv and irr?
Which of the following would be included in Gross National Product (GNP) but not in Gross Domestic Product (GDP) of the United States? O a. the earnings of an American-owned factory in Germany O b. the income of American government employees working in Washington, D.C. O c. the income of employees of foreigners working in foreign embassies in the U.S. O d. the income of a Texan employed in Oklahoma O e. the earnings of a Japanese-owned factory in the U.S.
The correct Answer is C. The income of employees of foreigners working in foreign embassies in the U.S based on GNP and GDP
A macroeconomic factor called national income can be used to assess a country's economic stability. It indicates the overall revenue generated by a nation's economic activities within a given year.
The two concepts of GDP and GNP are used to calculate national income in the most desired manner. Gross domestic product (GDP) and gross national product (GNP) are two different terms.
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the evidence from hyperinflations indicates that money growth and inflation are positively related, which is consistent with the quantity theory of money true or falase
The answer to this question is true. Rapid, excessive, and out-of-control general price increases in an economy are referred to as hyperinflation.
What is hyperinflation?When there is a considerable increase in the money supply without accompanying economic expansion, hyperinflation frequently results.
Governments frequently increase the amount of money in circulation to fund budget deficits, stimulate the domestic economy, or both. The real worth of the currency falls as more is made available, and prices rise.
As the relative value of the local currency falls in relation to other currencies due to hyperinflation, it swiftly loses value in foreign exchange markets.
Holders of the home currency will be compelled by this situation to reduce their holdings and switch to more stable foreign currencies.
The Zimbabwean dollar was replaced by a foreign currency as a medium of exchange as a result of the out-of-control hyperinflation in that country.
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atlantis fisheries issues zero coupon bonds on the market at a price of $462 per bond. these are callable in 7 years at a call price of $530. using semiannual compounding, what is the yield to call for these bonds?
The yield to call for the said bonds is 1.95%
Market price = $462
Time to be callable = 7 years
Call price = $530
The amount a bondholder or an investor would make if they held a bond until it was called before to maturity is known as yield to call. However. Bonds with a zero coupon give no coupon payments.
Using the formula of yield to call -
[( CP - MV ) / n ] / [ (CP + MV ) / 2 ]
Substituting the values -
= [( 530 - 462 ) / 7 ] / [ ( 530 + 462 ) / 2 ]
= ( 68/7) / 496
= 9.71/496
= 0.01958 or
= 1.95%
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pangbourne whitchurch has preferred stock outstanding. the stock pays a dividend of $4 per share, and sells for $40. what is the percentage cost of the preferred stock? (enter your answer as a whole percent.)
The share value of the favored inventory is 10%.
Calculation is as follow:
Percentage cost of preferred stock = Dividend/Selling price × 100
Percentage cost of preferred stock = $4/$40 × 100
Percentage cost of preferred stock = 10%
What is favored stock?
Preferred stock is a type of inventory that has traits of both shares and bonds. Like bonds, desired shares make cash payouts, frequently at a greater yield than bonds, while presenting higher dividend returns and less danger than frequent stock.
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https://brainly.com/question/18068539#SPJ4what is the effect of recording a sale of inventory under the perpetual inventory system on the financial statements? (assume that the sales price is higher than the cost of inventory)
Stockholders' equity increases, Total assets increase and Net income increases are the effect of recording a sale of inventory under the perpetual inventory system on the financial statement.
Financial statements are documents that describe a enterprise's operations and financial performance. Government entities, accounting companies, and other organizations frequently audit financial accounts to assure their accuracy and for tax, financing, or investment purposes. Financial statements goal is to give users of all types of information that they can use to make decisions about the economy about an enterprise's financial situation, performance, and changes in financial position.
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the sales (in thousands of units) of a new product after it has been on the market for years is given by (a) find as a function of if 4000 units have been sold after 1 year. (b) how many units will saturate this market? (c) how many units will have been sold after 5 years?
Sales The cumulative sales S (in thousands of units) of a new product after it has been on the market for t years are modeled by S = 60(1 − kt).
First, we will put the given equation in front of us:
S = 25(1-e^{kt})
S=25(1−e kt )
A transaction between the customer and the vendor wherein the vendor sells intangible or tangible items, assets, or offerings in opposition to cash is referred to as a sale. Sale is performed among two or extra events. In broader terms, a sale may be is known as a contract between two or more events i.e. the buyer and the vendor.
Sales refer back to the trade of a product, commodity, provider, or delivery for cash. It includes supporting prospective customers or customers by being attentive to them and understanding their wants and desires to discover what they are looking for.
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economic value added (eva) is a means of evaluating corporate performance. true false question. true false
Economic Value Added (EVA)is a mean of evaluating corporate performance --- True
EVA measures the performance of a company and its management based on the idea that a company can only make a profit if it creates wealth and returns to its shareholders. will be required. EVA as a performance indicator is very useful.
What is the performance of EVA?Economic value added (EVA) is a measure of a company's economic performance based on what is added to the company's value by its operating income (excluding taxes) less the company's "cost of capital". The EVA concept was introduced by his management consulting firm Stern Stewart in the 1980s.
Why is EVA with economic value important?EVA is a key indicator of the value your business is creating. This can improve profits generated by lowering capital costs or increasing revenues.
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Which of the following is not a characteristic of the Oa. The accrual basis of accounting supports the O b. Revenues and expenses are reported in the accrual basis of accounting? matching concept. period in which cash is received or paid. C. Expenses are reported in the same period as the revenues to which they relate. O d. Revenues are reported on the income statement in the period in which they are earned.
The time in which cash is received or paid is when revenues and costs are reported. As a result, choice A is accurate.
Revenues and expenses are reported in the period in which cash is received or paid under the cash basis of accounting, not the accrual basis.
According to the accrual foundation of accounting, regardless of when cash is received or paid, revenues and expenses should be shown in the income statement in the period they are earned or incurred. The matching idea of accounting, which asserts that expenses should be recorded at the same time as their associated expenses are incurred, is likewise supported by this.
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The correct question is:
Which of the following is not a characteristic of the accrual basis of accounting?
A. Revenues and expenses are reported in the period in which cash is received or paid.
B. Revenues are reported in the income statement in the period in which they are earned.
C. Supports the matching concept.
D. All are correct
