1) Under accrual basis accounting, we record revenue when ________.

A) cash is received from customers

B) cash is received for any reason

C) it meets the criteria for revenue recognition

D) a company receives cash from a customer on account

2) Under accrual basis accounting, we record expenses when ________.

A) a company pays cash to a supplier

B) a company incurs a liability

C) a company uses resources

D) a company pays cash to anyone

3) Which of the following is(are) a deficiency(deficiencies) of cash-basis accounting?

A) it omits key revenues and expenses from the balance sheet

B) it fails to match revenues and expenses to measure economic performance

C) it omits key assets and key liabilities from the balance sheet

D) B and C

4) In the United States, Generally Accepted Accounting Principles are developed primarily by ________.

A) International Accounting Standards Board

B) Financial Accounting Standards Board

C) Securities and Exchange Commission

D) International Accounting Federation

5) An audit guarantees that there are absolutely no mistakes in the financial statements. (T / F)

6) Generally Accepted Accounting Principles in the United States are developed by the International Accounting Standards Committee. (T / F)

1. Explain the concept of profit maximization when the marginal revenue equals marginal cost

2. Differentiate: Average Fixed Cost, Average Variable Cost, and Average Total Cost

In 2018, X Company's revenue-based profit function was 0.35R - $76,800. Only one change is expected in 2019, a 10% decrease in total fixed costs. What must revenue be in 2019 for X Company to earn $38,000?

In 2018, X Company sold 5,000 units of its only product for $35.70 each. Unit costs were as follows:

In 2019, the selling price, variable costs per unit, and total fixed costs are not expected to change. Assuming a tax rate of 31%, how many units must X Company sell in 2019 in order to earn $64,000 after taxes?

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X Company, a merchandiser, had the following income statement for 2018:

$97,828 of the cost of goods sold were variable, and $28,423 of the other operating expenses were variable. If cost behavior in 2019 is expected to continue as it did in 2018, what must total sales be in 2019 in order for X Company to break even?

All of the following can affect a​ firm's total revenue except which​ one?

1. opportunity costs
2. discounts
3. rebates
4. returns

Amazon buys BestBuy and increases the prices of all goods by 30%. As a result, the company now sells 115,000 units instead of 210,000 units for the quarter. What is the elasticity of demand?

A. 2.0

B. 3.0

C. .50

D. 4.0

You are a manager at Percolated​ Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your​ office, drops a​ consultant's report on your​ desk, and​ complains, "We owe these consultants

$1.4

million for this​ report, and I am not sure their analysis makes sense. Before we spend the

$15

million on new equipment needed for this​ project, look it over and give me your​ opinion." You open the report and find the following estimates​ (in millions of​ dollars):

All of the estimates in the report seem correct. You note that the consultants used​ straight-line depreciation for the new equipment that will be purchased today​ (year 0), which is what the accounting department recommended. The report concludes that because the project will increase earnings by

$6.800

million per year for ten​ years, the project is worth

$68 million

. You think back to your halcyon days in finance class and realize there is more work to be​ done!  

​First, you note that the consultants have not factored in the fact that the project will require

$7 million in working capital upfront​ (year 0), which will be fully recovered in year 10.​ Next, you see they have attributed

$1.2 million of​ selling, general and administrative expenses to the​ project, but you know that

$0.6 million of this amount is overhead that will be incurred even if the project is not accepted.​ Finally, you know that accounting earnings are not the right thing to focus​ on!

a. Given the available​ information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed​ project?

b. If the cost of capital for this project is

13%​,

what is your estimate of the value of the new​ project?

Why does profit maximization occur where the marginal revenue from the last unit sold             equals the marginal cost from the last unit produced? Can an oligopoly sustain long-run          economic profit? Explain.

Question 1

1. Brandeis, Inc. sells rhombus-shaped widgets and generates $1,000,000 in sales revenue for 2019. If profit is $195,000, variable costs per unit are $25, and sales volume is 25,000 units, then the break-even point must be:

   	A.	10,000 units
   	B.	12,000 units
   	C.	12,500 units
   	D.	15,000 units
   	E.	None of the above.

Revenue Journal; Accounts Receivable subsidiary and General Ledgers

Sage Learning Centers was established on July 20 to provide educational services. The services provided during the remainder of the month are as follows:

Required:

1a. Journalize the transactions (in chronological order) for July, using a single-column revenue journal. If an amount box does not require an entry, leave it blank.

1b. Journalize (including the date) and post the appropriate transaction for July, in the two-column general journal. If an amount box does not require an entry, leave it blank. Posting references will be recorded in part 2.

1c. Post to the following customer accounts in the accounts receivable ledger, and insert the balance immediately after recording each entry: D. Chase; J. Dunlop; F. Mintz; T. Quinn; K. Tisdale.

For those boxes in which no entry is required, leave the box blank.

2. Post the revenue journal and the general journal to the following accounts in the general ledger, inserting the account balances only after the last postings:

12 Accounts Receivable

13 Supplies

41 Fees Earned

For those boxes in which no entry is required, leave the box blank.

3a. What is the sum of the balances of the customer accounts in the subsidiary ledger at July 31?
$

3b. What is the balance of the accounts receivable controlling account at July 31?
$

4. Assume Sage Learning Centers began using a computerized accounting system to record the sales transactions on August 1. All of the following are benefits of the computerized system over the manual system EXCEPT:

Answer the following questions:

Q.1) Is collecting cash from customers accounts receivable an expense or revenue or neither ?

Q.2) Are cash receipts recorded as revenues?

Q.3) Is paying for accounts payable an expense?

A brief outline in your own words of the key principle(s) underlying AASB15 Revenue from Contracts with Customers