Can you explain the logic behind this question? When fictitious revenues are created, it would overstate...

Can you explain the logic behind this question?

When fictitious revenues are created, it would overstate current year's income and it would not affect the next year's income.

Expert Solution

The logic of answer is Income statement is prepared for a particular period only.

Fictitious revenue increases the current year income since revenues are overstated and expense is correctly stated. Income statement is prepared for a particular year since it is closed end of the year by transferring all balances to income summary account. The net income for the year is transferred to Retained earnings based on difference between Net revenue and net expenses.

The next year income statement does not have any affect because the income statement is prepared afresh without reference to previous year. Only current year revenue and expenses affects the current year income. A retained earnings is the sum of accumulated net profit or loss carried over every year. If the overstated net income of a particular year has to be corrected it has to be restated by adjusting retained earnings only as rectification entry. No entry can be taken to income statement.

ekkarill92 answered 2 years ago

Can someone explain the logic behind this question? The addition of 1 g of which of...

Can someone explain the logic behind this question? The addition of 1 g of which of the following compounds to distilled water would cause the least change in pH? a) Cs(OH) b)HCl c) LiH d) LiOH I know that HCL is a strong acid which elimates that since it will affect PH. In class we had to memorize that group I metals with OH are strong bases making which LiOH and CsOH follow. The answer is A. The solution to...

List and explain the logic behind the “four functions of money.” Then, consider the following: In...

List and explain the logic behind the “four functions of money.” Then, consider the following: In many prisons, cigarettes are used as money. Do cigarettes in prison have the ability to satisfy these four functions? Explain.

1. Explain the logic behind the application purchasing power price theory to explain changes in the...

1. Explain the logic behind the application purchasing power price theory to explain changes in the spot exchange rate. 2. Assume US interest rates are generally above foreign interest rates. a. what does this sideway about the future strength or weakness of the dollar based on the IFE (international Fisher effect)? b. should US investors invest in foreign securities if they believe in the IFE? c. should foreign investors invest in US securities if they believe in the IFE?

Explain the logic behind the net present value decision rule and the internal rate of return...

Explain the logic behind the net present value decision rule and the internal rate of return decision rule.

Explain the logic behind the Bass diffusion model. How is the model useful to marketing managers?...

Explain the logic behind the Bass diffusion model. How is the model useful to marketing managers? What are the managerial implications of the model?

Write up to 10 lines to explain the logic used behind this code pls!!!!! *****************************************/ #include...

Write up to 10 lines to explain the logic used behind this code pls!!!!! *****************************************/ #include <iostream> #include <string> #include <iomanip> #include<activaut.h> #include<activdbg.h> using namespace std; int main() { int MatchesPlayed[6], MatchesWon[6], MatchesLost[6], MatchesDraw[6], MatchesPoints[6], TotalPoints[6]; MatchesWon[0] = 3; MatchesLost[0] = 0; MatchesDraw[0] = 1; //India MatchesWon[1] = 2; MatchesLost[1] = 0; MatchesDraw[1] = 1; //NZ MatchesWon[2] = 0; MatchesLost[2] = 3; MatchesDraw[2] = 0; //Australia MatchesWon[3] = 1; MatchesLost[3] = 2; MatchesDraw[3] = 1;...

Explain how a project can be evaluated when the project 1.) boosts revenues or 2). by...

Explain how a project can be evaluated when the project 1.) boosts revenues or 2). by reducing expenses

Write up to 10 lines to each code explain the logic used behind these code pls!!!!!...

Write up to 10 lines to each code explain the logic used behind these code pls!!!!! (10 lines for each please) 1. #include<iostream> using namespace std; int main() { int id, reverse[20], count = 0, min = 0, max = 0; cout << "\nStudent ID Number is \n"; cin >> id; while (id != 0) { reverse[count] = id % 10; if (count == 0) { min = reverse[count]; max...

Write up to 4 or 5 lines to explain the logic used behind those codes. Separately...

Write up to 4 or 5 lines to explain the logic used behind those codes. Separately for each please 1) #include <iostream> #include <string> #include <fstream> #include <vector> #include <sstream> using namespace std; int main() { ifstream infile("worldpop.txt"); vector<pair<string, int>> population_directory; string line; while(getline(infile, line)){ if(line.size()>0){ stringstream ss(line); string country; int population; ss>>country; ss>>population; population_directory.push_back(make_pair(country, population)); } } cout<<"Task 1"<<endl; cout<<"Names of countries with population>=1000,000,000"<<endl;...

Write up to 10 lines to explain the logic used behind this code pls!!!!! #include <iostream>...

Write up to 10 lines to explain the logic used behind this code pls!!!!! #include <iostream> #include <iomanip> #include<cmath> #include<AclUI.h> using namespace std; int main() { int array[][2] = { {29,60} , {33,80} , {45,90} , {57,52} , {12,44} , {21,78} , {32,64} , {17,59} }; //given values int Totalstudents = 0,TotalPass = 0, Average = 0; for (int i = 0; i < 8; i++) //students enrooled { Totalstudents += array[i][0]; } ...

Question