Answer:
United States continue to have quotas because it increases the price of imported Sugar and thereby reducing the quantity demanded.
Explanation:
To start with, quotas is a restriction imposed by a government. Quotas limits the quantity of a good that can be imported into a country during a specific period of time. In this question, an import license specifies the quantity of Sugar that be brought into (imported) the USA.
United States continue to have these quotas because import quotas reduces the supply of imported goods (Sugar), thereby, preventing an uncontrolled importation of Sugar. This raises the price of imported Sugar against the price of locally produced Sugar which is lower in price. Intuitively, consumers will go for lower price (locally produced Sugar) which satisfies the law of demand for normal goods.
Therefore, it helps the domestic producers to stay in the competition.
Answer:protectionism
Explanation:
On June 1, Year 1, Yola Corp. lent Dale $500,000 on a 12% note, payable in five annual installments of $100,000 beginning January 2, Year 2. In connection with this loan, Dale was required to deposit $5,000 in a noninterest-bearing escrow account. The amount held in escrow is to be returned to Dale after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, Year 1. Dale made timely payments through November 1, Year 1. On January 2, Year 2, Yola received payment of the first principal installment plus all interest due. At December 31, Year 1, Yola’s interest receivable on the loan to Dale is ________.
Answer:
C) $10,000
Explanation:
The last interest payment was made on November 1, so by December 31, two months worth of interest is considered receivable.
Interest receivable = principal x interest rate x time periods = $500,000 x 12% x (2/12) = $10,000
By December 31, no principal payments had been done yet.
Answer:
Options Include:
A. $0
B. $5,000
C. $10,000 is Correct
D. $15,000
Explanation:
Since the last interest payments were paid on November 1, the November and December interest is not paid as of December 31, 2005.
As of December 31, 2005, a gross receivable of $10,000= (2/12)(12 per cent)($500,000) is therefore receivable for two months of interest.
As of this date no principal payments have been made.
Rare earth metals are used to manufacture some important electronic components in popular products like cell phones. These metals are not really rare, but they are expensive to extract from the ground. What happens to the market for the rare earth metals if these extraction costs increase?
If extraction costs for rare earth metals increase, it will impact the market by making them more expensive for manufacturers, potentially leading to a decrease in demand.
Explanation:If the extraction costs for rare earth metals increase, it will have an impact on the market for these metals. The increase in extraction costs will make it more expensive for manufacturers to obtain the rare earth metals needed to manufacture electronic components. As a result, the prices of these metals are likely to increase, making them less affordable for manufacturers and potentially leading to a decrease in demand. This could also create opportunities for alternative materials to be used in the manufacturing process, potentially impacting the rare earth metals market in the long term.
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Clara is an advertising director who has been tasked with optimizing her company's Google Search campaign. How can Clara use the optimization score to benefit her campaign?
A. To judge the popularity of her website compared to others
B. To compare the efficacy of her ad text creative with that of other ads
C. To understand the network performance of her website
D. To find how close her campaign is from potential ideal results
Answer:
To find how close her campaign is from potential ideal results
Explanation:
Organisations use the optimisation score to know how the Google ads account they set up would likely perform. The scoring is between 0% to 100%, and when the account attains the 100% mark, it would likely perform optimally.
The scores are usually put together with a list of recommendations an organisation can pick from and in each of the recommendations, the organisation can see how their optimisation score would be affected should they decide to apply that recommendation.
If the level of economic development in the former West Germany is higher that the level of economic development in the former East Germany, then which of the following is likely to occur?
a the share of total economic activity will rise
b the population in west germany territories will increase
c the east german territories will be a lucrative market for consumer goods
d there will be a decline in total economic activity
Answer:
b the population in west germany territories will increase
Explanation:
People tend to move towards the areas of development to be able to get jobs where they will either make it big or be able to provide food, clothing and shelter for themselves and families if any. Economic development creates jobs and opportunities and it brings in different people from all works of life looking for those jobs.
The method of slicing digital messages into parcels, transmitting them along different communication paths, and reassembling them at their destinations is calledA) multiplexing.B) packet switching.C) packet routing.D) ATM.
Answer: Packet switching.
Explanation:
Packet switching is a method of transmitting information where the information is divided into packets and sent, and then the information packets are reassembled back together when the information get to the destination.
On January 2, Matthews Corporation acquired 20% of the outstanding common stock of Dernier Company for $700,000. For the year ended December 31, Dernier reported net income of $180,000 and paid cash dividends of $60,000 on its common stock. At December 31, the carrying value of Matthews' investment in Dernier under the equity method is:
a. $688,000.
b. $700,000.
c. $712,000.
d. $724,000.
Answer:
d. $724,000.
Explanation:
700,000 investment on Dernier for 20% equity
180,000 x 20% = 36,000 proportional participation on Income
60,000 x 20% = (12,000) proportional payment of dividends
Net equity 724,000
under equity method we increase/decrease the percentage of the net income/loss As we participate in the desition making process to arrive it.
We decrease the cash payment as we are paying ourselve As we decide or have influence on the declaration adn distribution of the dividends
Gramps purchased a joint survivor annuity that pays $700 monthly over his remaining life and that of his wife, Gram. Gramps is 70 years old and Gram is 65 years old. Gramps paid $145,530 for the contract. How much income will Gramps recognize on the first payment?
Answer:
$54.95 interest income
Explanation:
We look int othe legal tables to recognize income in this type of annuities considering the age of each participant
Table VI - Ordinary Joint Life and Last Survivor Annuities; Two Lives - Expected Return Multiples
multiplier at cross 75 / 70 : 18.8
we take the annual income of 700 x 12 = 8,400
and multiply by the 18.8 = 157,920
now we solve for part of capital and interest:
145,530/157,920 = 0.92154 = 92.15%
principal returns are 92.15% while interest the remaining 7.85%
700 x 7.85% interest = $54.95 interest income
According to the law of supply:there is a direct relationship between price and the quantity supplied.there is an inverse relationship between price and the quantity supplied.there is a direct relationship between price and quantity demanded.there is an inverse relationship between price and quantity demanded.
Answer:
there is a direct relationship between price and the quantity supplied
Explanation:
According to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.
There is a direct relationship between price and quantity supplied. This is why the supply curve is upward sloping.
I hope my answer helps you
The law of supply states there's a direct relationship between price and quantity supplied by producers; an increase in price will result in an increase in quantity supplied. The inverse relationship between price and quantity is part of the law of demand, not supply.
Explanation:The law of supply states that there is a direct relationship between price and the quantity supplied by producers. This means that as the price of a product or service increases, the quantity that producers are willing to supply also increases and vice versa. This is because higher prices provide an incentive for producers to produce more.
On the other hand, the inverse relationship between price and quantity demanded is part of the law of demand, not the law of supply. The law of demand states that as prices rise, demand decreases and vice versa. It is because consumers tend to purchase less of a product as its price increases.
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What is the document that the marketing researcher pledges to deliver as a result of the marketing research process?
Answer: Marketing research proposal
Explanation: A marketing research proposal simply means a detailed outline of market research plan. It entails the processes involves in the research study which includes the aims and objectives of the market research which is included in the problem statement, Developing ways to solve the identified problem, Formulating the design or model for the research, collection of required data (both qualitative and quantitative) , data preparation, cleansing and analysis and Report preparation and presentation.
The definition of supervisor as "any individual having the authority to hire, transfer, suspend, recall, or discipline other employees; or responsibility to direct them, or to adjust their grievances" comes from ?
Answer:
The Taft Hartley Act, 1947
Explanation:
The Taft Hartley Act, which is also referred to Labor Management Relations Act , came into force on June 23, 1947 as a means to control and regulate the powers of labor trade unions in the United States.
The act barred labor unions from carrying out unfair labor activities such as disruptive or political strikes or acts of solidarity. The act made a clear distinction between employees and supervisors.
Supervisors have the power to hire individuals, retain them, direct them, discipline their actions and also to address their grievances and complaints.
Supervisors as defined under the act are not prohibited from organizing unions. But unlike employees, their interests are not safeguarded from the outcome of those union activities.
Rice and potatoes are substitutes in consumption. If the price of rice rises and there is a bumper crop of potatoes, in the market for potatoes one would expect the equilibrium price to _____ and the equilibrium quantity to _____.
a) equilibrium price to rise, fall, or stay the same and equilibrium quantity to rise.
b) equilibrium price to rise and the equilibrium quantity to fall.
c) equilibrium price and quantity both to fall.
d) equilibrium price to rise and the equilibrium quantity to fall, rise, or stay the same.
Answer:
a) equilibrium price to rise, fall, or stay the same and equilibrium quantity to rise.
Explanation:
Substitute goods are goods that can be used in place of each other.
If the price of rice rises, consumers shift to the consumption of potatoes. Price and quantity demanded of potatoes increases
The bumper harvest increases supply of potatoes. Price falls and quantity increases.
The effect on equilibrium quantity of potatoes would be indeterminate but equilibrium quantity would rise.
I hope my answer helps you
Final answer:
When the price of rice rises and there's a bumper crop of potatoes, the equilibrium price for potatoes may rise, fall, or stay the same, but the equilibrium quantity is expected to increase due to increased demand and supply.
Explanation:
When considering the situation where rice and potatoes are substitutes in consumption, and the price of rice rises, the demand for potatoes is likely to increase as consumers switch to the cheaper substitute. Simultaneously, a bumper crop of potatoes implies an increase in the supply of potatoes. According to the principles of market equilibrium, an increase in demand would generally lead to a higher equilibrium price and quantity, whereas an increase in supply would lead to a lower equilibrium price and higher quantity demanded.
If both the demand for potatoes increases (due to higher rice prices) and the supply of potatoes increases (due to a bumper crop), the equilibrium price movement might be ambiguous, depending on the relative magnitude of the shifts in demand and supply curves. However, the equilibrium quantity of potatoes can be expected to rise, since both the increase in demand and increase in supply suggest a larger quantity. Therefore, the correct answer is a) equilibrium price to rise, fall, or stay the same and equilibrium quantity to rise.
Greg is the marketing manager of an apparel manufacturing company that specializes in winter wear. He personally visited the old age homes in which the company sponsored Christmas lunches, as part of its corporate social responsibility initiative. In the context of managerial roles, which of the following roles does Greg illustrate in this scenario?a. leader role
b. monitor role
c. figurehead role
d. disseminator role
Answer: (C) Figurehead role
Explanation:
According to the given question, Greg is one of the marketing manager in the manufacturing company and he visited to the old age home where the company organized the Christmas lunch.
The company initiate the social responsibility and based on the given scenario, the Greg is best illustrating the figurehead role.
The figurehead role is one of the essential role of the manager in an organization as it is the responsibility for inspiring the employees of an organization.
Therefore, Option (C) is correct answer.
Consider a used-car market with asymmetric information. The owners of used cars know what their vehicles are worth but have no way of credibly demonstrating those values to potential buyers. Thus, potential buyers must always worry that the used car they are being offered may be a low-quality "lemon."a. Suppose that there are equal numbers of good and bad used cars in the market and that good used cars are worth $13,000 while bad used cars are worth $5,000. What is the average value of a used car?b. By how much does the average value exceed the value of a bad used car? By how much does the value of a good used car exceed the average value?c. Would a potential seller of a good used car be willing to accept the average value as payment for her vehicle?d. If a buyer negotiates with a seller to purchase the seller’s used car for a price equal to the average value, is the car more likely to be good or bad?e. Will the used car market come to feature mostly—if not exclusively—lemons? How much will used cars end up costing if all the good cars are withdrawn?
Answer:
A) the average value of a used car = ($13,000 + $5,000) / 2 = $18,000 / 2 = $9,000
B) the average value is $4,000 higher than the value of a bad used car. A good used car exceeds the average value by $4,000.
C) No, because he/she knows that his good used car is worth much more.
D) If the seller accepts the average value, it is more likely that his car is a bad car.
E) The majority of used cars should be bad or lemon, since good used cars will be sold quickly. If all good used cars were removed, then the price of used cars would drop to $5,000 (the value of a lemon car).
A car rental cost $90.00 last year. This year it cost $102.99. What is the inflation rate, to the nearest tenth percent?
Answer:
14.43%
Explanation:
Given that
Last year rental cost of the car = $90
This year rental cost of the car = $102.99
So, the inflation rate equal to
= (This year rental cost of the car - Last year rental cost of the car) ÷ (Last year rental cost of the car)
= ($102.99 - $90) ÷ ($90)
= ($12.99) ÷ ($90)
= 14.43%
We simply applied the above formula to compute the inflation rate
Answer:
14.43%
Explanation:
To calculate inflation rate subtract the previous price from the current price. Then divide your answer from the previous price. Multiply that by 100 to get the percentage and thats your answer.
A company that manufactures frozen pizza rolls is employing the shaping process (one of the learning theories) to get consumers to try its products. The free samples offered by the company and the discount coupons have been received well by consumers. In general, the overall goal of a learning theory is:
Answer:
It is to evaluate the response to introduction of new services and how learning are delivered.
Explanation:
Learning theory is the process of developing and transferring knowledge and also how the new introductions are received by the target audience . It can be affected by old experiences ,environmental influences and the state of mind as at the time of learning.
It is grouped into cognitive , conditioning and social learning theory.
Its main reason is to evaluate how audience reacts to introduction of new ideas , good and services and how well it was delivered.
When industries are limited by the size of the domestic market, opening trade to the world markets will likely lead to ________ and ________ real GDP per capita in the domestic country. a. diseconomies of scale; increase b. diseconomies of scale; decrease c. economies of scale; increase d. economies of scale; decrease
Answer: c) economies of scale; increase
Explanation:
When industries are limited by the size of the domestic market, opening trade to the world markets will likely lead to economies of scale and increase real GDP per capita in the domestic country.
When this industry choose to break out of this limitation placed on them due to the small size of market in their country, the idea of opening trade to the world market would lead to reduction in production costs since they now have a larger market (and thus produce more). Also, the real GDP per capita in the domestic country should increase since the company in this domestic nation has expanded its production to the world market.
NOTE:
Economies of scale occur when the cost of production is now reduced because there is an increase in a company's production.
People are not motivated when they do not have clear goals and do not know what is expected of them. ________ reduces uncertainty and indicates what everyone is expected to accomplish.
Answer:
Planning
Explanation:
Planning is the process of setting goals and defining the actions required to achieve the goals.
The planning process involves deciding before hand, what is to be achieve or what is to be done, ways by which it will be done and when it will be done. It helps to reduce uncertainty by setting directions that is to be followed to accomplish the set objectives.
Waterway Industries reported the following year-end information: Beginning work in process inventory $1080000 Beginning raw materials inventory 300000 Ending work in process inventory 900000 Ending raw materials inventory 480000 Raw materials purchased 1200000 Direct labor 1060000 Manufacturing overhead 780000 Waterway Industries's cost of goods manufactured for the year is 1. $3220000. 2. $2860000. 3. $2680000. 4. $3040000.
Answer:
The correct answer is option (D).
Explanation:
According to the scenario, the given data are as follows:
Beginning work = $1,080,000
Beginning raw materials = 300,000
Ending work = 900,000
Ending raw materials = 480,000
Raw materials purchased = 1,200,000
Direct labor = 1,060,000
Manufacturing overhead 780,000
First we calculate direct material used,
Direct material used = 300,000 + 1,200,000 - 480,000
= 1,020,000
So, we can calculate the cost of goods manufactured by using following formula:
Cost of Goods Manufactured = Direct Material Used + Direct Labor + Manufacturing Overhead + Opening Work - Closing Work
= 1,020,000 + 1,060,000 + 780,000 + 1,080,000 - 900,000
= $3,040,000
Hence, the cost of goods manufactured is $3,040,000.
A corporation declares a dividend of $3.00 on Tuesday, December 6th. The record date is set at Friday, December 30th, with the dividend payable on January 6th. Based on this information, the ex date is set at December 28th. For the recipient of the dividend, the "tax event" occurs on:
StatusA A. December 6th
StatusB B. December 26th
StatusC C. December 30th
StatusD D. January 6th
Answer:
30+28+6=64÷3.00
Explanation:
add 30 28 6 then divide $3.00
The tax event for the recipient of the dividend occurs on the payment date, which in this case is January 6th.
Explanation:The “tax event” for a dividend typically occurs on the date that the dividend is actually paid out to shareholders. In the scenario provided, the corporation declares a dividend of $3.00 on December 6th, the record date is December 30th, and the dividend is payable on January 6th. Therefore, the tax event for the recipient of the dividend would be on the payment date, which is January 6th.
Consider the accompanying data on breaking load (kg/25 mm width) for various fabrics in both an unabraded (U) condition and an abraded (A) condition. Use the paired t test to test: H0: μD = 0 versus Ha: μD > 0 at significance level 0.01. (Use μD = μU-A.) Note: The data below is formatted such that you can copy and paste it into R.
Answer:
Explanation: see attachment
The question requires a paired t-test to compare the mean breaking loads of unabraded and abraded fabric samples. This test will determine the validity of both a null and alternative hypothesis, using a significance level of 0.01 to evaluate the obtained p-value.
Explanation:The question is asking you to perform a paired t-test on the given data to test two different hypotheses: the null hypothesis (H0) that the mean difference of the breaking load (μD = μU - μA) is equal to zero, and the alternative hypothesis (Ha) that the mean difference is greater than zero.
The paired t-test is used to compare the means of two related samples to determine if there is a significant difference between them. In this case, the comparison is made between unabraded and abraded fabrics.
After performing the t-test, the p-value obtained would be compared to the significance level (0.01). If the p-value is less than the signficance level, we reject the null hypothesis and accept the alternative hypothesis. If the p-value is greater than the significance level, we fail to reject the null hypothesis - concluding that there is not enough evidence to prove that the mean difference is significant.
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Producer surplus is the area A. under the demand curve and above the price. B. between the supply and demand curves. C. below the price and above the supply curve. D. under the supply curve.
Answer:
C. below the price and above the supply curve
Explanation:
The Producer surplus is the difference between the price received for a product and the minimum price the seller is willing to accept for the same product. This area on the graph is below the price line and above the supply curve.
A production possibilities frontier ___________________.
Select the correct answer below:
a. is the same as a budget constraint.
b. is best used when a specific budget is provided.
d. demonstrates the constraints that society faces in production.
d. is a straight line.
Answer:
A production possibilities frontier:
d. demonstrates the constraints that society faces in production.
Explanation:
A production possibilities frontier (PPF) is a curve that shows the quantity of two goods that can be produced using the same limited resources. The PPF stipulates that resource in an economy like labor, raw materials and and capital are limited thus there is always a point in time where the quantity of goods to be produced is also limited. An value on the PPF curve represents the maximum production limit that can be achieved when the resources in the economy are utilized efficiently. A value below the curve represents inefficiency in production and represents a potential to improve a country's production capability. To move beyond the PPF curve a country has to change it's future technology.
A PPF differs from a budget constrain in one major aspect aspects. The budget constraint is a straight line meaning since it's slope is given by relative prices of two goods, while the PPF is curved due to the law of diminishing returns.
Which quality of an asset makes it more appropriate for the fair value principle rather than the historical cost principle?
Answer and Explanation:
Fair value refers to the current market price of the asset while historical cost is the cost at which the asset was acquired. Fair market value will always be higher than historical cost so it reflects the actual worth of the asset.
One of the qualities that makes valuing current assets at fair value rather than historical cost is the availability and reliability of current market price or fair value of current assets.
Mercy Eston, a start-up company, has a small office space. Its employees often complain about the lack of personal space because of a congested seating arrangement and lack of a proper ventilation system. In this scenario, the employees of Mercy Eston are most likely facing _____ to communication.
Answer:
Physical Barriers
Explanation:
Physical Barriers refers to the physical set up or physical environment of an organization which act as a barrier in sending and receiving messages between employees. These are environmental and natural barriers which obstruct the swift flow of communication at a workplace.
Examples of physical barriers to communication would include, issues in design of the workplace, workplace interiors such as spacing, ventilation, noise, etc.
The given case relates to such physical barriers to communication.
The employees at Mercy Eston are likely encountering physical barriers to communication due to the cramped and poorly ventilated office environment, which can inhibit effective interactions and impact overall job performance.
The employees of Mercy Eston are most likely facing physical barriers to communication. A congested seating arrangement and lack of a proper ventilation system can create discomfort and distractions that inhibit the flow of communication across the office. It is crucial for an office to support effective communication by ensuring sufficient personal space and comfort for employees. Studies have shown that environmental factors such as space customization, physical comfort, and workplace aesthetics can significantly impact psychological wellbeing, job satisfaction, and overall productivity. Furthermore, the physical proximity between colleagues needs to be appropriate, neither too far (public speaking distance) nor too close (intimate distance), to maintain the delicate balance of effective verbal communication within a business setting.
At the strategic level of planning, managers must pay attention to the macroenvironment, be future- oriented, and ____.a. have more focus on technology b. have more control over employee issues c. have less competition deal with uncertain and competitive conditions
Answer:
deal with uncertain and competitive conditions
Explanation:
Strategic level planning required being able to see the big picture, which includes the company's environment and how it affects the company. The manager must also realize that the environmental conditions change constantly and if you are planning ahead for the next 10 years, then a lot changes will happen. You must understand that your plans must be able to deal with uncertain environmental conditions, specially those regarding the competition and government regulations. A lot of what ifs must be included in your strategic planning.
In a business context, legal counsel is not only a primary and important source of information and advice but is also solely responsible for making decisions about how to resolve a dispute.A.TrueB.False
Answer:
False
Explanation:
The role of a legal counsel within an organization is to manage the legal risk associated with the business. the legal counsel within an organization understands the pressure points, strategy and objectives of the business and communicates the risks and legal issues involved in any decision to management within the organization.
For example: the legal counsel is not solely responsible for making decisions to resolve dispute, but the legal counsel is part of the party that resolves dispute within business organization without going to court.
While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00, Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for $2.75 . She thinks to herself, "Is it worth the extra 25 cents to get the medium fries?" To an economist, Sally's decision is an example of:________.
a. marginal analysis.
b. basing decisions on total, rather than marginal, value.
c. an unintended consequence.
d. the fallacy of composition.
Answer:
a. marginal analysis.
Explanation:
The cost to add the fried will be the cost added to obtain the fries rather than the cost of a single medium order of fries.
This is the basis of the marginal analysis on which the revenue and marginal cost represent the extra revenue granted for an additional unit and the extra cost for producing an unit. In theory, the firm produce when marginal revenue matches marginal cost.
Matt is planning to invest $7,000 in a mutual fund at the end of each of the next eleven years. If his opportunity cost rate is 5 percent compounded annually, how much will his investment be worth after the last annuity payment is made? Use a financial calculator to determine the amount.
a. $92,665
b. $95,526
c. $97,257
d. $99,448
Final answer:
To calculate the value of Matt's investment after the last annuity payment, we can use the formula for the future value of an ordinary annuity. Plugging in the given values, we find that Matt's investment will be worth approximately $95,526 after the last annuity payment is made.
Explanation:
To calculate the value of Matt's investment after the last annuity payment, we can use the formula for the future value of an ordinary annuity:
[tex]FV = PMT * ((1 + r)^n - 1) / r[/tex]
Where FV is the future value, PMT is the annuity payment, r is the interest rate, and n is the number of periods.
In this case, PMT is $7,000, r is 5% (0.05), and n is 11. Plugging these values into the formula:
FV = $[tex]7,000 * ((1 + 0.05)^11 - 1) / 0.05 = $95,525.93[/tex]
So, Matt's investment will be worth approximately $95,526 after the last annuity payment is made. Therefore, the correct answer is b. $95,526.
Richard Moore is the controller for Ajax Company. Recently, he suffered several large losses at the race track, causing him to incur enormous personal debts. Which type of non-sharable financial problem best describes Richard’s situation?
Answer:
Violation of Ascribed Obligation
Explanation:
Non Shareable Financial Problem
These are the type of financial debt that can cause some sort of shame or stigma in the individual's head. An individual may start committing fraud when faced with this pressure. It results because the individual feels unable to seek help from others It is part of the FRAUD TRIANGLE made up of
a. Percieved opportunity
b. Rationalization
c. Non shareable financial need.
The non shareable financial need is sub divided into 6 groups
1. Violation of ascribed obligation
2. Problems resulting from personal failure
3. Business reversals
4. Physical isolation
5. Status gaining
6. Employer-employee relationship.
Violation of ascribed obligation occurs when an individual is unable to pay his debts. This may lead to the individual engaging in illegal activities in order to catch up with the debt. Richard Moore is facing this kind of problem after losing his money on the race track.
If a journal entry and posting for Salaries Expense that incurred during this year but will be paid until next year is accidentally omitted, what would be the impact on the financial statements?
A) Net Income would be overstated (Expenses understated) and Balance Sheet liabilities would be understated.
B) Net Income would be overstated (Expenses understated) and Balance Sheet assets would be overstated.
C) Net Income would be understated (Expenses overstated) and Balance Sheet assets would be understated.
D) Net Income would be understated (Expenses overstated) and Balance Sheet liabilities would be understated.
Answer: The correct answer is A) Net Income would be overstated (Expenses understated) and Balance Sheet liabilities would be understated.
Explanation: An omission of a posting of an expense incurred during a financial year and payable in thesubsequent year will lead to an understatement of expenses and understatement of liabilities.
In general, when an expense is omitted it leads to increased net income as less expense will be knocked off against income.
The balance sheet on the other hand will be understated in terms of a reduced liability balance.