In the Economic Order Quantity (EOQ) model, if lead time increases from five to ten days, what will be the impact on the EOQ?
A) It will double
B) It will increase, but not double
C) It will decrease by a factor of two.
D) It will remain unchanged
D) It will remain unchanged
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Answer the following statements true (T) or false (F)
1. Vacation, health, and pension benefits must be estimated and recorded as a liability. 2. When an employee takes a paid vacation, the Vacation Benefits Payable account will be decreased with a credit. 3. A pension plan is a plan that provides benefits to retired employees. 4. Warranties pose an accounting challenge because a company does not know which or how many products will have to be repaired. 5. The entry to accrue the warranty payable includes a credit to Warranty Expense.
In July, a company pays three years' insurance in advance. The December 31 adjusting entry is
a. Insurance Expense – Debit; Prepaid Insurance – Credit b. Prepaid Insurance – Debit; Insurance Expense – Credit c. Insurance Expense – Debit; Cash – Credit d. Prepaid Insurance – Debit; Cash – Credit
On the date of initial issuance of a financial instrument , the market value will equal
a. the initial issue proceeds [the amount borrowed]. b. the sum of the future cash flows. c. the maturity value of the instrument. d. the par value of the instrument. e. the par value of the instrument minus the premium or plus a discount.
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