An income statement shows the sources of revenue, the types of expenses, and the amount of the net income or net loss for the period
Indicate whether the statement is true or false
T
You might also like to view...
What was the amount of direct materials used in production during the year?
Garrett Corporation provided the following information for the year:
A) $66,000
B) $360,000
C) $383,000
D) $831,000
Power centers tend to be smaller than lifestyle centers
Indicate whether the statement is true or false
The dual nature of accounting implies that every accounting transaction:
a. must affect only two accounts. b. must increase one account balance and decrease another. c. must affect at least two accounts. d. must be recorded twice—first, in the journal and then, in the ledger.
Barry Clarion, new-accounts manager at East Bank of New Hampshire, has been asked to project how many new accounts he will open during 20x2. The local economy has been growing, and the bank has experienced a 10% increase in the number of new accounts over each of the past five years. In 20x1, the bank had 10,000 accounts.Clarion is paid a salary, plus a bonus of $20 for every new account above the budgeted amount. Thus, if the annual budget calls for 1,000 new accounts, and 1,080 new accounts are obtained, his bonus will be $1,600 (80 × $20).Clarion believes that the local economy will continue to grow at the same rate in 20x2 as it has in recent years. He decided to submit a projection of 700 new accounts for 20x2.Required: Your consulting firm has been hired by the bank president to
make recommendations for improving the bank's operation. Write a memorandum to the president defining and explaining the negative consequences of budgetary slack. Also discuss the bank's bonus system for the new-accounts manager and how the bonus program tends to encourage budgetary slack. What will be an ideal response?