What is the significance of the timing in which cash is paid or received as it relates to the adjusting process?
Cash paid before an expense is incurred results in a deferred expense, which is recognized as an asset on the balance sheet. The adjusting entry reduces the asset and recognizes a corresponding amount of expense. Cash received before revenue is earned requires the recognition of a liability, a deferred revenue. The adjusting entry reduces the liability and recognizes a corresponding amount of revenue. At the end of the period, if cash has not been paid or received, amounts must be accrued for any assets expected to be received or any liabilities owed.
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The equity method of accounting is used if the investor owns at least 20% of the investee and the investor is able to secure influence over the investee
a. True b. False Indicate whether the statement is true or false
Diffusion refers to ________
A) how promotion is used to support products throughout their product life cycle B) the second stage of the market segmentation process C) the methodology for evaluating new product ideas D) how the use of a product spreads throughout a population E) the selection of opinion leaders to encourage product acceptance
Billings Company has developed the following budgeted income statement: Sales revenue (2,300 units × $14 sales price)$32,200 Total Variable cost (2,300 × $6 per unit) (13,800) Contribution margin$18,400 Fixed cost (10,000) Net income$8,400 The Company is experimenting with new engineering techniques and believes it can reduce variable cost to $4.50 per unit and significantly improve the product. The innovations would double fixed costs but the company expects to be able to increase sales to 3,500 units. If this strategy is pursued the company's budgeted net income will:
A. increase by $13,250. B. increase by $4,850. C. decrease by $4,150. D. decrease by $4,250.
Posting a transaction means ________
A) calculating the balance in an account B) transferring data from the journal to the ledger C) preparing a summary of account balances D) finding the account number in the chart of accounts