The guidelines for accounting information are called Generally Accepted Accounting Principles (GAAP)
Indicate whether the statement is true or false
TRUE
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On January 1, 2016, Randolf Company signed a contract to have Rory Associates construct a manufacturing facility at a cost of $14,000,000. It was estimated that it would take three years to complete the project. Also on January 1, 2016, to finance the construction cost, Randolf borrowed $14,000,000 payable in seven annual installments of $2,000,000 plus interest at the rate of 9%. During 2016, Randolf made progress payments totaling $5,000,000 under the contract, and the average amount of accumulated expenditures was $3,000,000 for the year. The excess borrowed funds were invested in short-term securities, from which Randolf realized investment income of $330,000. What amount should Randolf report as capitalized interest at December 31, 2016?
A. $ 0 B. $ 270,000 C. $ 510,000 D. $1,260,000
If the effect of the debit portion of an adjusting entry is to increase the balance of an expense account, which of the following describes the effect of the credit portion of the entry?
A) decreases the balance of an owner's equity account B) increases the balance of a liability account C) increases the balance of an asset account D) decreases the balance of an expense account
A chartered financial analyst would probably have the most interest in which of the following ratios?
a. Times interest earned b. Earning per share c. Return on equity after tax d. Price/earnings ratio
In regard to any of the five forces that shape competition, it is important to note that their relative strengths are context-dependent. Elaborate on this statement with the help of a real-world example.
What will be an ideal response?