U.S. GAAP and IFRS companies commonly measure and report net income and comprehensive income
Indicate whether the statement is true or false
True
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Expenses originate from
a. using an asset or recognizing liabilities. b. incurring liabilities or providing services to customers. c. collecting cash from customers. d. paying off liabilities.
Which of the following is/are true regarding the Work-in-Process Inventory account?
a. The Work-in-Process Inventory account accumulates the cost of raw materials transferred to the factory floor. b. The Work-in-Process Inventory account accumulates the cost of direct labor used in production. c. The Work-in-Process Inventory account accumulates the manufacturing overhead costs. d. The Work-in-Process Inventory account is credited for the manufacturing costs assigned to the finished units transferred to the finished goods storeroom. e. all of the above
Cost behavior refers to the manner in which:
A) a cost changes as the related activity changes B) a cost is allocated to products C) a cost is used in setting selling prices D) a cost is estimated
Pauline's Products Inc is considering investing in a new piece of equipment that costs $75,000. The equipment is expected to generate revenues of $25,000 per year for five years. The equipment would be depreciated using the straight-line method over its five year life and have a salvage value of $8,000. The company considers the impact of income taxes in all of its capital investment decisions
The company has a 35 percent income tax rate and desires an after-tax rate of return of 12 percent on its investment. The net present value of the equipment is: A) $7,042. B) $(13,472). C) $21,248. D) $5,453.